JOHN B. SANFILIPPO & SON, INC.
------------------------------
2299 Busse Road
Elk Grove Village, Illinois 60007
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------------------------------
To be held on October 28, 1998
TO THE STOCKHOLDERS:
The annual meeting of stockholders of John B. Sanfilippo & Son, Inc.
(the "Company") will be held on Wednesday, October 28, 1998 at 10:00
a.m., local time, at the Wyndham Hotel Northwest Chicago, 400 Park
Boulevard, Itasca, Illinois 60143, for the following purposes:
1. To elect directors;
2. To consider and take action upon a proposal to approve the John B.
Sanfilippo & Son, Inc. 1998 Equity Incentive Plan (the "1998
Equity Incentive Plan") which provides for the issuance of
incentive stock options and nonqualified stock options. The Plan
(a copy of which is attached hereto as Exhibit A) is intended to
replace the Company's 1995 Equity Incentive Plan (the "1995
Plan"), which was terminated by the Company's Board of Directors
as of August 27, 1998; provided, however, that unexercised stock
options that are outstanding under the 1995 Plan shall continue to
be governed by the provisions of the 1995 Plan;
3. To ratify the action of the Board of Directors in appointing
PricewaterhouseCoopers LLP as the Company's independent
accountants for the fiscal year ending June 24, 1999; and
4. To transact such other business as may properly be brought before
the annual meeting or any adjournment or postponement thereof.
The annual meeting may be postponed or adjourned from time to time
without any notice other than announcement at the meeting, and any and
all business for which notice is hereby given may be transacted at any
such postponed or adjourned meeting.
The Board of Directors has fixed the close of business on September
11, 1998 as the record date for determination of stockholders entitled
to notice of and to vote at the annual meeting.
Stockholders are requested to complete and sign the enclosed proxy,
which is solicited by the Board of Directors, and promptly return it
in the accompanying envelope whether or not they plan to attend the
annual meeting in person. The proxy is revocable at any time before
it is voted. Returning the proxy will in no way limit your right to
vote at the annual meeting if you should later decide to attend and
vote in person.
Because two classes of stock of the Company are now outstanding, a
separate form of proxy has been prepared with respect to each class of
stock: a white proxy, which relates to the Company's Common Stock,
$.01 par value, and a blue proxy, which relates to the Company's Class
A Common Stock, $.01 par value. Stockholders who own of record shares
of only one class are being furnished only with the proxy relating to
that class. Stockholders who own of record shares of both classes are
being furnished with both proxies (in separate mailings, each of which
also includes a copy of this notice and the proxy statement).
Stockholders who receive both proxies must complete, sign and return
both proxies in order for the shares of both classes to be voted by
proxy.
By Order of the Board of Directors
/s/ MICHAEL J. VALENTINE
------------------------
MICHAEL J. VALENTINE
Secretary
Elk Grove Village, Illinois
September 15, 1998
JOHN B. SANFILIPPO & SON, INC.
- ------------------------------
PROXY STATEMENT
- ---------------
ANNUAL MEETING OF STOCKHOLDERS
- ------------------------------
October 28, 1998
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of John B. Sanfilippo & Son, Inc., a
Delaware corporation, of proxies for use at the annual meeting of
stockholders of the Company to be held on Wednesday, October 28, 1998
at 10:00 a.m., local time, at the Wyndham Hotel Northwest Chicago, 400
Park Boulevard, Itasca, Illinois 60143, and at any postponement or
adjournment thereof (the "Annual Meeting"). All shares of the
Company's Common Stock, $.01 par value (the "Common Stock"), and the
Company's Class A Common Stock, $.01 par value (the "Class A Stock"),
entitled to vote at the Annual Meeting which are represented by
properly executed proxies will, unless such proxies have been revoked,
be voted in accordance with the instructions given in such proxies.
Any stockholder who has given a proxy may revoke it at any time prior
to its exercise at the Annual Meeting by delivering a written notice
of revocation or a duly executed proxy bearing a later date to the
Secretary of the Company, or by attending the Annual Meeting and
voting in person. Any written notice of revocation or subsequent
proxy should be delivered to the Company at 2299 Busse Road, Elk Grove
Village, Illinois 60007, Attention: Secretary, or hand delivered to
the Secretary, before the closing of the polls at the Annual Meeting.
Unless the context otherwise requires, references herein to the
"Company" refer to John B. Sanfilippo & Son, Inc. and its
subsidiaries.
This Proxy Statement and accompanying proxy are being mailed to
stockholders on or about September 15, 1998. The mailing address of
the principal executive offices of the Company is 2299 Busse Road, Elk
Grove Village, Illinois 60007.
RECORD DATE AND SHARES OUTSTANDING
- ----------------------------------
The Company had outstanding on September 11, 1998, the record date for
determination of stockholders entitled to notice of and to vote at the
Annual Meeting, 5,461,139 shares of Common Stock (excluding 117,900
treasury shares) and 3,687,426 shares of Class A Stock. The Common
Stock is traded on the Nasdaq National Market. There is no
established public trading market for the Class A Stock.
VOTING AND QUORUM
- -----------------
Pursuant to the Company's Restated Certificate of Incorporation (the
"Restated Certificate"), so long as the total number of shares of
Class A Stock outstanding is greater than or equal to 12.5% of the
total number of shares of Class A Stock and Common Stock outstanding,
generally the holders of Common Stock voting as a class are entitled
to elect such number (rounded to the next highest number in the case
of a fraction) of directors as equals 25% of the total number of
directors constituting the full Board of Directors and the holders of
Class A Stock voting as a class are entitled to elect the remaining
directors. The holders of Common Stock are not entitled to cumulative
voting. In connection with the election of directors, however, each
holder of Class A Stock has the right, in person or by proxy, to
either (a) vote the number of shares of Class A Stock owned by such
holder for as many persons as there are directors to be elected by
holders of Class A Stock ("Class A Directors"), or (b) cumulate said
votes (by multiplying the number of shares of Class A Stock owned by
such holder by the number of candidates for election as a Class A
Director) and either (i) give one candidate all of the cumulated
votes, or (ii) distribute the cumulated votes among such candidates as
the holder sees fit.
Three proposals are scheduled for stockholder consideration at the
Annual Meeting, each of which is described more fully herein: (i) the
election of seven directors of the Company; (ii) the approval of the
John B. Sanfilippo & Son, Inc. 1998 Equity Incentive Plan (the "1998
Equity Incentive Plan"); and (iii) the ratification of the action of
the Board of Directors in appointing PricewaterhouseCoopers LLP as the
Company's independent accountants for the fiscal year ending June 24,
1999. At the meeting, the holders of Common Stock voting as a class
will be entitled to elect two of the seven directors, and the holders
of Class A Stock voting as a class will be entitled to elect the
remaining five directors. With respect to all matters other than the
election of directors or any matters for which class voting is
required by law, the holders of Common Stock and the holders of
Class A Stock will vote together as a single class and the holders of
Common Stock will be entitled to one vote per share of Common Stock
and the holders of Class A Stock will be entitled to ten votes per
share of Class A Stock.
Attendance at the meeting in person or by proxy by the holders of
Common Stock entitled to cast at least a majority of the votes which
the Common Stock is entitled to cast at the Annual Meeting is required
in order to establish a quorum for the purpose of electing the
directors to be elected by holders of the Common Stock (the "Common
Stock Directors"). Attendance at the Annual Meeting in person or by
proxy by the holders of Class A Stock entitled to cast at least a
majority of the votes which the Class A Stock is entitled to cast at
the Annual Meeting is required in order to establish a quorum for the
purpose of electing the Class A Directors. Attendance at the meeting
in person or by proxy by the holders of Common Stock and Class A Stock
entitled to cast at least a majority of the votes which such stock is
entitled to cast at the Annual Meeting on matters other than the
election of directors is required in order to establish a quorum for
the purpose of any other business. Assuming the presence of a quorum,
(i) the affirmative vote of a majority of the shares of Common Stock
and Class A Stock, voting separately as a class, present in person or
by proxy at the Annual Meeting will be required for the election of
the Common Stock Directors and Class A Directors, respectively, and
(ii) the affirmative vote of the holders of shares representing a
majority of the votes entitled to be cast by the holders of Common
Stock and Class A Stock, voting together as one class, present in
person or by proxy at the Annual Meeting and entitled to vote thereon
shall be required to act on all other matters to come before the
Annual Meeting.
Votes may be cast by a stockholder in favor of the nominees for
election as directors or withheld. Similarly, votes may be cast by a
stockholder in favor or against approval of the 1998 Equity Incentive
Plan, or in favor or against ratification of the appointment of the
independent accountants, or a stockholder may elect to abstain from
voting on these issues. Directions to withhold authority, abstentions
and broker non-votes (which occur when a nominee holding shares for a
beneficial owner does not vote on a particular proposal because the
nominee does not have discretionary voting power with respect to that
item and has not received instructions from the beneficial owner) will
be counted in determining the presence or absence of a quorum for the
transaction of business at the Annual Meeting. Abstentions and
directions to withhold authority will have the effect of votes against
the proposal being considered. Broker non-votes, because they are not
deemed to be entitled to vote with respect to any matter for which a
broker does not have authority to vote, are not counted in the vote
totals and will have no effect on any proposal scheduled for
consideration at the Annual Meeting.
If a properly executed, unrevoked proxy does not specifically direct
the voting of the shares covered by such proxy, the proxy will be
voted (a) FOR the election of all nominees for election as director to
be elected by holders of the class of shares covered by such proxy as
listed herein, (b) FOR the approval of the 1998 Equity Incentive Plan,
(c) FOR the ratification of the appointment of PricewaterhouseCoopers
LLP as the Company's independent accountants for the fiscal year
ending June 24, 1999, and (d) in accordance with the judgment of the
persons named in the proxy as to such other matters as may properly
come before the Annual Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
The following table sets forth information as of September 11, 1998
with respect to the beneficial ownership of Common Stock and Class A
Stock by (a) the persons known by the Company to be the beneficial
owners of more than 5% of the outstanding shares of Common Stock or
Class A Stock, (b) each director of the Company, (c) each of the
executive officers named in the Summary Compensation Table below
("Named Executive Officers"), and (d) all directors and executive
officers of the Company as a group. The information set forth in the
table as to directors and executive officers is based upon information
furnished to the Company by them in connection with the preparation of
this Proxy Statement. Except where otherwise indicated, the mailing
address of each of the stockholders named in the table is: c/o John B.
Sanfilippo & Son, Inc., 2299 Busse Road, Elk Grove Village, Illinois
60007.
<TABLE>
<CAPTION>
% of
Outstanding % of % of Outstanding
No. of Shares Shares of No. of Shares Outstanding Votes on Matters
Of Common Common Of Class Shares of Class Other than Election
Name Stock(1) Stock A Stock(1)(2) A Stock of Directors
- --------------------------- ------------- ----------- ------------- --------------- -------------------
<S> <C> <C> <C> <C> <C>
Jasper B. Sanfilippo(3)+- 39,400 1.0% 1,523,776 41.3% 36.1%
Mathias A. Valentine(4)+- None -- 627,515 17.0 14.8
Marian Sanfilippo(5) 8,152 * 914,720 24.8 21.6
Michael J. Valentine(6)+- 13,365 * 621,415 16.9 14.7
Gary P. Jensen(7)- 9,900 * None -- *
John C. Taylor(8)+- 18,890 * None -- *
Steven G. Taylor(9)- 17,700 * None -- *
William D. Fischer(10)+ 16,875 * None -- *
J. William Petty(11)+ 2,500 * None -- *
John W. A. Buyers(12)+ 6,175 * None -- *
Swiss Bank Corporation(13) 753,700 13.8 None -- 1.8
Dimensional Fund (14) 438,500 8.0 None -- 1.0
Heartland Advisors (15) 300,000 5.5 None -- 1.0
All directors and executive
officers as a group (12
persons, all of whom are
stockholders)(3)(4)(6)(7)
(8)(9)(10)(11)(12)(16) 149,697 2.7 2,772,706 75.2 65.7
</TABLE>
+ Denotes Director.
- Denotes Named Executive Officer.
* Less than one percent.
(1) Except as otherwise indicated below, beneficial ownership means
the sole power to vote and dispose of shares. In calculating each
holder's percentage ownership and beneficial ownership in the
table above, shares of Common Stock which may be acquired by the
holder through the exercise of stock options exercisable on or
within 60 days of September 11, 1998 are included.
(2) Each share of Class A Stock is convertible at the option of the
holder thereof at any time and from time to time into one share of
Common Stock. In addition, the Restated Certificate provides that
Class A Stock may be transferred only to (a) Jasper B. Sanfilippo
or Mathias A. Valentine, (b) a spouse or lineal descendant of
Mr. Sanfilippo or Mr. Valentine, (c) trusts for the benefit of any
of the foregoing individuals, (d) entities controlled by any of
the foregoing individuals, (e) the Company, or (f) any bank or
other financial institution as a bona fide pledge of shares of
Class A Stock by the owner thereof as collateral security for
indebtedness due to the pledgee (collectively, the "Permitted
Transferees"), and that upon any transfer of Class A Stock to
someone other than a Permitted Transferee each share transferred
will automatically be converted into one share of Common Stock.
(3) Includes 163,045 shares of Class A Stock held as trustee of
certain trusts, the beneficiaries of which are the children of
Jasper and Marian Sanfilippo (two of whom - Jasper B. Sanfilippo,
Jr. and James J. Sanfilippo are executive officers of the
Company). Includes 3,400 shares of Common Stock that Mr. and Mrs.
Sanfilippo hold in joint tenancy. Excludes shares held or voted
by Jasper B. Sanfilippo's wife, Marian Sanfilippo, of which Mr.
Sanfilippo disclaims beneficial ownership.
(4) Excludes 24 shares of Common Stock held by Mathias A. Valentine's
wife, Mary Valentine, of which Mr. Valentine disclaims beneficial
ownership.
(5) Includes 890,220 shares of Class A Stock held as trustee of
certain trusts, the beneficiaries of which are the children of
Jasper and Marian Sanfilippo (two of whom - Jasper B. Sanfilippo,
Jr. and James J. Sanfilippo are executive officers of the
Company). Excludes shares held or voted by Marian Sanfilippo's
husband, Jasper B. Sanfilippo, of which Mrs. Sanfilippo disclaims
beneficial ownership. Excludes 3,400 shares of Common Stock that
Mr. and Mrs. Sanfilippo hold in joint tenancy.
(6) Includes (a) options to purchase 563 shares of Common Stock, 1,200
shares of Common Stock and 450 shares of Common Stock at $6.60,
$10.3125, and $6.875, respectively, per share which are
exercisable by Michael J. Valentine on or within 60 days of
September 11, 1998, (b) 621,415 shares of Class A Stock held as
trustee of certain trusts (collectively, the "Valentine Trusts"),
the beneficiaries of which are the children of Mathias and Mary
Valentine, including Michael J. Valentine, and (c) 3,000 shares of
Common Stock owned by a general partnership, the general partners
of which are the Valentine Trusts.
(7) Includes options to purchase 2,250 shares of Common Stock, 1,950
shares of Common Stock, and 700 shares of Common Stock at $9.625,
$9.375, and $6.25, respectively, per share, which are exercisable
by Gary P. Jensen on or within 60 days of September 11, 1998.
(8) Includes options to purchase 10,000 shares of Common Stock, 3,400
shares of Common Stock, 1,125 shares of Common Stock, 2,475 shares
of Common Stock and 700 shares of Common Stock at $15.00, $13.75,
$6.00, $9.375 and $6.25, respectively, per share which are
exercisable by John C. Taylor on or within 60 days of September
11, 1998.
(9) Includes options to purchase 10,000 shares of Common Stock, 3,400
shares of Common Stock, 1,125 shares of Common Stock, 2,475 shares
of Common Stock and 700 shares of Common Stock at $15.00, $13.75,
$6.00, $9.375 and $6.25, respectively, per share which are
exercisable by Steven G. Taylor on or within 60 days of September
11, 1998.
(10) Includes options to purchase 4,000 shares of Common Stock, 750
shares of Common Stock, 375 shares of Common Stock, 500 shares of
Common Stock and 250 shares of Common Stock at $12.25, $10.50,
$6.00, $6.625 and $6.00, respectively, per share which are
exercisable by William D. Fischer on or within 60 days of
September 11, 1998. Mr. Fischer's mailing address is 680 North
Lake Shore Drive, Chicago, Illinois 60611.
(11) Includes options to purchase 750 shares of Common Stock, 500
shares of Common Stock and 250 shares of Common Stock at $8.25,
$6.625 and $6.00, respectively, per share which are exercisable by
J. William Petty on or within 60 days of September 11, 1998. Mr.
Petty's mailing address is 425 Ahwahnee Road, Lake Forest,
Illinois 60045.
(12) Includes options to purchase 4,000 shares of Common Stock, 750
shares of Common Stock, 375 shares of Common Stock, 500 shares of
Common Stock and 250 shares of Common Stock at $12.25, $10.50,
$6.00, $6.625 and $6.00, respectively, per share which are
exercisable by John W. A. Buyers on or within 60 days of September
11, 1998. Mr. Buyers' mailing address is 827 Fort Street,
Honolulu, Hawaii 96813.
(13) The information set forth in the table above and in this footnote
is based solely on (i) a Schedule 13G dated February 9, 1996 filed
jointly by Brinson Holdings, Inc. ("BHI"), Brinson Partners, Inc.
("BPI"), Brinson Trust Company ("BTC"), SBC Holding (USA), Inc.
("SBCUSA") and Swiss Bank Corporation ("SBC"), as amended through
February 11, 1998 and (ii) Forms 13F as of June 30, 1998 filed by
BPI and BTC. BPI is a wholly owned subsidiary of BHI and BTC is a
wholly owned subsidiary of BPI. BHI is a wholly owned subsidiary
of SBCUSA, which is a wholly owned subsidiary of SBC. The
principal business office of BPI and BHI is located at 209 South
LaSalle Street, Chicago, IL 60604. The principal business office
of SBCUSA is located at 222 Broadway, New York, NY 10038. The
principal business office of SBC is located at Aeschenplatz 6 CH-
4002, Basel, Switzerland.
(14) The information set forth in the table above and in this footnote
is based solely on a Schedule 13G dated February 10, shares voted
by officers of Dimensional Fund Advisors Inc. Includes 148,000
shares voted by officers of Dimensional Fund Advisors Inc. in
their capacities as officers of DFA Investment Dimensions Group
Inc. and The DFA Investment Trust Company (open-end management
investment companies). The principal business office of
Dimensional Fund Advisors Inc. is 1299 Ocean Avenue, 11th floor,
Santa Monica, CA 90401.
(15) The information set forth in the table above and in this footnote
is based solely on a Schedule 13G dated March 10, 1998 and a Form
13F as of June 30, 1998 filed by Heartland Advisors Inc. The
principal business office of Heartland Advisors Inc. is 790 North
Milwaukee Street, Milwaukee, WI 53202.
(16) Includes options to purchase a total of 72,876 shares of Common
Stock (including the options referred to in footnotes 6, 7, 8, 9,
10, 11 and 12 above) at prices ranging from $6.00 to $15.00 per
share which are exercisable by certain of the directors and
executive officers on or within 60 days of September 11, 1998.
ELECTION OF DIRECTORS
---------------------
Seven directors are to be elected to serve until the next annual
meeting of stockholders and until their respective successors shall be
elected and qualified. Two of such directors are to be elected by the
holders of Common Stock voting as a class and the remaining five
directors are to be elected by the holders of Class A Stock voting as
a class. While the Board of Directors does not contemplate that any
nominee for election as a director will not be able to serve, if any
of the nominees for election shall be unable or shall fail to serve as
a director, the holders of proxies shall vote such proxies for such
other person or persons as shall be determined by such holders in
their discretion or, so long as such action does not conflict with the
provisions of the Company's Restated Certificate relating to the
proportion of directors to be elected by the holders of Common Stock,
the Board of Directors may, in its discretion, reduce the number of
directors to be elected.
The Board of Directors recommends that the stockholders vote "FOR"
each of the nominees listed herein.
The affirmative vote of a majority of the shares of Common Stock
present at the Annual Meeting is required to elect the nominees for
election by the holders of Common Stock. The affirmative vote of a
majority of the total votes possessed by the shares of Class A Stock
present at the meeting, in accordance with the cumulative voting
rights possessed by holders of Class A Stock, is required to elect the
nominees for election by the holders of Class A Stock.
NOMINEES FOR ELECTION BY THE HOLDERS OF COMMON STOCK
----------------------------------------------------
The name of and certain information regarding each nominee for
election to the Company's Board of Directors by the holders of Common
Stock, as reported to the Company, is set forth below.
WILLIAM D. FISCHER, DIRECTOR, age 69 -- Mr. Fischer served as the
President and Chief Operating Officer of Dean Foods Company, a
publicly traded dairy and specialty food products company based in
Franklin Park, Illinois, from 1989 through December 1993. He also
served as that company's Vice President, Finance from 1971 to 1989,
Secretary from 1973 to 1988, Treasurer from 1973 to 1984 and a
director from 1979 to March 1996. Mr. Fischer has also served as a
director and a member of the compensation committee of Allied Products
Corporation, a manufacturer of industrial and agricultural machinery,
since 1993. Mr. Fischer has been a member of the Company's Board of
Directors since December 1991 and is a member of the Company's Audit
Committee and Compensation Committee.
JOHN W. A. BUYERS, DIRECTOR, age 70 -- Mr. Buyers is currently
employed by C. Brewer and Company, Limited ("C. Brewer"), based in
Honolulu, Hawaii, where he has served as Chief Executive Officer since
1975 and as Chairman of the Board since 1982. Mr. Buyers is also
currently the Chairman of the Board, President and Chief Executive
Officer of Buyco, Inc., the privately held parent company of
C. Brewer, and has served in those capacities since 1986. C. Brewer
is a diversified agribusiness, specialty foods company and developer
of commercial and agricultural real estate. It is the world's leading
producer of macadamia nuts (Mauna Loar) and guava (KAIr and Mauna
La'ir). In addition, C. Brewer specializes in the roasting,
processing, marketing and distribution of Kona Coffee (Royal Konar and
Mauna Kear) as well as the processing, marketing and distribution of
Hawaiian fruit jams, jellies and syrups (Kukuir). C. Brewer also
distributes products and services for the agricultural, environmental
and construction industries. In addition, Mr. Buyers currently serves
on the board of directors of First Hawaiian Bank, First Hawaiian,
Inc., Mauna Loa Macadamia Partners, L.P., and C. Brewer Homes, Inc.
Mr. Buyers has been a member of the Company's Board of Directors since
January 1992 and is a member of the Company's Audit Committee and
Compensation Committee.
NOMINEES FOR ELECTION BY THE HOLDERS OF CLASS A STOCK
-----------------------------------------------------
The name of and certain information regarding each nominee for election
to the Company's Board of Directors by the holders of Class A Stock, as
reported to the Company, is set forth below.
JASPER B. SANFILIPPO, CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
AND DIRECTOR, age 67 -- Mr. Sanfilippo has been employed by the Company
since 1953. Mr. Sanfilippo served as the Company's President from 1982
to December 1995 and was the Company's Treasurer from 1959 to October
1991. He became the Company's Chairman of the Board and Chief
Executive Officer in October 1991 and has been a member of the
Company's Board of Directors since 1959. Mr. Sanfilippo is also a
member of the Company's Compensation Committee and was a member of the
Stock Option Committee until February 27, 1997 (when that Committee was
disbanded). Since June 1992, Mr. Sanfilippo has been a member of the
Board of Directors and a Vice President of Sunshine Nut Co., Inc.
("Sunshine"), a wholly-owned subsidiary acquired by the Company in
1992. Mr. Sanfilippo is the father of Jasper B. Sanfilippo, Jr. and
James J. Sanfilippo, each of whom is an executive officer of the
Company, the brother-in-law of Mathias A. Valentine, the President and
a director of the Company, and the uncle of Michael J. Valentine, a
director and an executive officer of the Company.
MATHIAS A. VALENTINE, PRESIDENT AND DIRECTOR, age 65 -- Mr. Valentine
has been employed by the Company since 1960 and was named its President
in December 1995. He served as the Company's Secretary from 1969 to
December 1995, as its Executive Vice President from 1987 to October
1991, and as its Senior Executive Vice President and Treasurer from
October 1991 to December 1995. He has been a member of the Company's
Board of Directors since 1969. Mr. Valentine is also a member of the
Company's Compensation Committee and was a member of the Stock Option
Committee until February 27, 1997 (when that Committee was disbanded).
Mr. Valentine has been a member of the Board of Directors and a Vice
President of Sunshine since June 1992. Mr. Valentine is the brother-
in-law of Jasper B. Sanfilippo, Chairman of the Board and Chief
Executive Officer and a director of the Company, the father of Michael
J. Valentine, a director and an executive officer of the Company, and
the uncle of Jasper B. Sanfilippo, Jr. and James J. Sanfilippo, each of
whom is an executive officer of the Company.
JOHN C. TAYLOR, EXECUTIVE GROUP VICE PRESIDENT AND DIRECTOR, age 52 --
Mr. Taylor has been the President and a director of Sunshine, which the
Company acquired in May 1992, since 1976. In August 1995, Mr. Taylor
was named a director of the Company and in December 1995 was appointed
the Executive Group Vice President of the Company (responsible for
coordinating certain joint activities of the Company and Sunshine). As
President of Sunshine, Mr. Taylor is responsible for overseeing that
company's processing, packaging, marketing and distribution of shelled
nuts. Mr. Taylor is the brother of Steven G. Taylor, an executive
officer of the Company.
J. WILLIAM PETTY, DIRECTOR, age 66 -- Mr. Petty served as the President
and Chief Executive Officer of Curtice Burns Foods, Inc. ("Curtice
Burns") from March 1993 until his retirement in November 1994 and as a
director of Curtice Burns from 1990 until November 1994. Curtice Burns
is a manufacturer and marketer of a diversified line of food products,
including canned and frozen vegetables and fruits, condiments, snack
foods and canned entrees. From 1990 to March 1993, Mr. Petty was the
Executive Vice President of Curtice Burns. In January 1996, Mr. Petty
became the President, Chief Executive Officer and a director of Orval
Kent Food Company, Incorporated, a Chicago, Illinois manufacturer and
marketer of refrigerated salads, side dishes and entrees. Mr. Petty
has been a director of the Company since August 1995 and is a member of
the Company's Audit Committee. He is a former member of the Board of
Directors of the Grocery Manufacturers of America and the National Food
Processors Association and is a current member of the Board of
Directors of the Refrigerated Foods Association.
MICHAEL J. VALENTINE, VICE PRESIDENT AND SECRETARY, age 39 -- Mr.
Valentine has been employed by the Company since 1987 and was named its
Vice President and Secretary in December 1995. He served as an
Assistant Secretary and the General Manager of External Operations for
the Company from June 1987 and 1990, respectively, to December 1995.
Mr. Valentine is the son of Mathias A. Valentine, the President and a
director of the Company, the nephew of Jasper B. Sanfilippo, Chairman
of the Board and Chief Executive Officer of the Company, and cousin of
Jasper B. Sanfilippo, Jr. and James J. Sanfilippo, each of whom is an
executive officer of the Company.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
-------------------------------------------------
The Board of Directors of the Company met four times during fiscal
1998. During fiscal 1998, all directors attended at least 75% of the
meetings of the Board of Directors and the committees thereof on which
they served. Standing committees of the Board of Directors include the
Audit Committee and the Compensation Committee. The Board does not
have a nominating committee, and the usual functions of such a
committee are performed by the entire Board.
The Audit Committee reviews and, as it deems appropriate, approves
internal accounting and financial controls for the Company and
accounting principles and auditing practices and procedures to be
employed in the preparation and review of financial statements of the
Company. The Audit Committee also makes recommendations to the Board
concerning the engagement of independent public accountants to audit
the annual consolidated financial statements of the Company and
arranges with such accountants the scope of the audit to be undertaken
by them. Further, the Audit Committee also reviews related party
transactions in accordance with the rules promulgated by the National
Association of Securities Dealers, Inc. The current members of the
Audit Committee are John W. A. Buyers, William D. Fischer and J.
William Petty. The Audit Committee held one meeting during fiscal
1998.
The Compensation Committee reviews and makes recommendations to the
Board with respect to the salaries, bonuses and other compensation of
officers and other executives, including matters relating to stock
options, which are determined by the entire Board of Directors. The
Compensation Committee consists of Jasper B. Sanfilippo, William D.
Fischer, John W. A. Buyers and Mathias A. Valentine. The Compensation
Committee held one meeting during fiscal 1998.
Compensation of Directors
- -------------------------
Compensation to directors who are not employees of the Company is paid
at the rate of $16,000 per year plus $1,000 for each Board meeting
attended, $350 for each telephonic meeting of the Board in which they
participate, $500 for each committee meeting attended and $350 for each
telephonic committee meeting in which they participate. Directors are
also reimbursed for their expenses incurred in attending such meetings.
Directors who are employees of the Company receive no additional
compensation for their services as directors.
The Board of Directors has adopted the 1998 Equity Incentive Plan, to
be effective as of September 1, 1998 subject to stockholder approval.
Under the 1998 Equity Incentive Plan, a director who is not an employee
of the Company, its subsidiaries, or any of their affiliates (an
"Outside Director") will automatically be granted an option to
purchase 1,000 shares of Common Stock on the date of his or her
election to the Company's Board, and on each date of his or her re-
election to the Board. Options granted to Outside Directors under the
1998 Equity Incentive Plan will be granted at an exercise price equal
to the Fair Market Value (as defined in the 1998 Equity Incentive Plan)
of a share of Common Stock on the date of grant. Options granted to
outside Directors will become exercisable in equal increments of 250
shares of Common Stock on the first four anniversaries of the date of
grant and expire 10 years following the date of grant.
EXECUTIVE COMPENSATION
----------------------
The following table sets forth a summary of compensation for services
in all capacities to the Company during the fiscal year ended June 25,
1998, the twenty-six weeks ended June 26,1997 (the "Transition
Period," effective April 30, 1997 the Company changed its fiscal year
from a year ending on December 31, to a year ending on the last
Thursday of June each year), and the fiscal years ended December 31,
1996 and December 31, 1995 paid to or accrued for (i) the Company's
Chief Executive Officer, and (ii) each of the four additional most
highly compensated executive officers of the Company (together with the
Chief Executive Officer, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
--------------------------
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
--------------------------- -----------
Securities
Name and Underlying All Other
Principal Position Year Salary Bonus Other(1) Options(#) Compensation
- ------------------------- ---- -------- ------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Jasper B. Sanfilippo(2) 1998 $403,077 $45,995 $6,231 -- $141,185(3)(4)
Chairman of the 1997+ 184,615 18,000 -- -- 63,972
Board and Chief 1996 395,877 0 -- -- 129,960
Executive Officer 1995 372,444 53,502 -- -- 130,200
Mathias A. Valentine(5) 1998 $243,077 $27,755 $2,082 -- $76,271(4)(6)
President 1997+ 110,769 10,800 -- -- 27,904
1996 236,539 0 -- -- 64,678
1995 217,720 31,276 -- -- 68,428
John C. Taylor(7) 1998 $178,153 $18,920 $606 -- $5,094(8)
Executive Group 1997+ 87,500 7,350 -- 2,800 4,116
Vice President 1996 172,424 0 -- -- 6,486
1995 164,649 20,651 -- 4,800 10,635
Steven G. Taylor(7) 1998 $178,153 $18,920 $366 -- $2,193(9)
Executive Vice 1997+ 87,500 7,350 -- 2,800 1,214
President 1996 172,424 0 -- -- 1,065
1995 164,649 20,651 -- 4,800 4,614
Gary P. Jensen(10) 1998 $143,446 $15,280 $498 -- $846(11)
Executive Vice 1997+ 64,615 5,880 -- 2,800 300
President, Finance and 1996 138,408 0 -- -- 300
Chief Financial Officer 1995 115,204 14,067 -- 5,600 --
</TABLE>
+ Compensation for the Transition Period 1997, which consists
of the twenty-six weeks ended June 26, 1997.
(1) None of the Named Executive Officers received
perquisites in excess of the lesser of $50,000 or 10% of the
aggregate of such officer's salary and bonus. The Other
Annual Compensation reflected is the Company's reimbursement
to the named executives for the tax liability incurred by the
named executives for a life insurance benefit as described in
the subsequent footnotes. The named executives are the only
employees who participate in this benefit.
(2) Mr. Sanfilippo also served as the Company's President
during the majority of 1995.
(3) Includes $116,503 of premiums paid by the Company under a
split-dollar agreement with Mr. Sanfilippo covering certain
joint and survivor life insurance policies issued on the joint
lives of Jasper B. Sanfilippo and his spouse. Also includes
$18,744 of life insurance premiums. During fiscal 1998, the
Company paid $5,938 for the term portions of the split-dollar
life insurance premiums of Mr. Sanfilippo.
(4) The split-dollar agreements require that the Company be
reimbursed for all premiums paid upon either the surrender of
the policies or the death of both insureds. The reimbursement
obligation is secured by a collateral assignment to the
Company of certain rights in the policies. The Company is
required to pay the monthly premiums; provided, however, each
of Messrs. Sanfilippo and Valentine may elect in any year to
pay that portion of the monthly premiums which would otherwise
be treated as taxable compensation to him under the Internal
Revenue Code of 1986, as amended (the "Code"). The Company
reflects the total amount of premiums it pays under the split-
dollar agreements as an asset on its financial statements.
(5) During the majority of 1995, Mr. Valentine served as the
Company's Senior Executive Vice President, Secretary and
Treasurer. He was named President of the Company in December
1995.
(6) Includes $40,008 of premiums paid by the Company under a
split-dollar agreement with Mr. Valentine covering certain
joint and survivor life insurance policies issued on the joint
lives of Mathias A. Valentine and his spouse. Also includes
$31,327 of life insurance premiums and $300 of matching
contributions to the 401(k) Plan described below. During
1998, the Company paid $4,636 for the term portions of the
split-dollar life insurance premiums of Mr. Valentine.
(7) The salary and bonus amounts set forth for Messrs. John
C. Taylor and Steven G. Taylor, executive officers of the
Company and Sunshine and employees of Sunshine, were paid to
them by Sunshine.
(8) Includes $2,520 of premiums paid by the Company under a
split-dollar agreement with Mr. Taylor covering his life.
Also includes $1,594 of disability insurance premiums, $680 of
life insurance premiums and $300 of matching contributions to
the 401(k) Plan described below. The split-dollar agreement
requires that the Company be reimbursed for all premiums paid
upon either the surrender of the policy or the death of the
insured. Sunshine reflects the total amount of premiums it
pays under the split-dollar agreement as an asset on its
financial statements.
(9) Includes $300 of matching contributions to the 401(k)
Plan described below, $680 of life insurance premiums and
$1,213 of disability insurance premiums paid by the Company
for fiscal 1998.
(10) During 1995, Mr. Jensen was hired as Vice President and
Chief Financial Officer of the Company. Mr. Jensen was named
the Company's Executive Vice President, Finance and Chief
Financial Officer in December 1995.
(11) Includes $300 of matching contributions to the 401(k)
Plan described below and $546 of life insurance premiums paid
by the Company for fiscal 1998.
Incentive Bonus Program
- -----------------------
During the Transition Period, the Compensation Committee
established an Incentive Bonus Program (the "Incentive Bonus
Program") to provide qualifying employees, including executive
officers, with cash bonuses. Under the Incentive Bonus Program,
cash bonuses are awarded based on the Company's earnings per
share and vary according to each qualifying employee's job
category. This program replaces the Company's previous Incentive
Compensation Program (the "Incentive Compensation Program").
Under the Incentive Bonus Program the Company paid aggregate
bonuses for fiscal 1998 of $442,139 in September 1998. The
Company awarded aggregate bonuses of $177,082 under the Incentive
Bonus Program for the Transition Period, which were paid in March
1998. The Company did not accrue or pay bonuses under the
Incentive Compensation Program for 1995. However, the
Compensation Committee did elect to award discretionary bonuses
totaling $368,302 to its employees for 1995, which were paid in
March 1996. The Company did not have an Incentive Compensation
Program in 1996 and did not pay any bonuses in 1996.
401(k) Plan
- -----------
The Company maintains a plan (the "401(k) Plan") which is
intended to qualify under sections 401(a) and 401(k) of the Code.
The 401(k) Plan was adopted in January 1986 and amended in
August 1992, January 1993, January 1994 and January 1996. All
non-union employees of the Company who have attained age 21 and
completed at least one year of service with the Company are
eligible to participate in the 401(k) Plan. The 401(k) Plan
permits each participant to make contributions on a pretax basis
subject to limitations established by the trustees who administer
the 401(k) Plan. The amount of participant contributions to the
401(k) Plan may also be limited by Code requirements. Effective
January 1, 1994, the Company contributes 50% of the amount each
employee contributes to the 401(k) Plan up to a maximum matching
contribution of $300 per employee. The Company may also make
discretionary contributions to the 401(k) Plan, which are
allocated among participants pro rata based on compensation. The
pretax contributions made by participants and the matching
contributions made by the Company, and earnings thereon, are at
all times fully vested. A participant's interest in
discretionary contributions made by the Company and earnings
thereon vest over a six year period and becomes fully vested upon
the earliest to occur of such participant's attainment of age 65,
death, disability or completion of six years of service.
Benefits under the 401(k) Plan may be distributed to participants
upon their termination of employment. In addition, the 401(k)
Plan permits employees who have attained age 59 1/2 years and who
have completed 10 years of service to withdraw all or a portion
of their 401(k) Plan account balances under certain
circumstances. In fiscal 1998, the Company made matching
contributions to the 401(k) Plan of $300 on behalf of each of
Messrs. Mathias Valentine, Jensen, Steven G. Taylor and John C.
Taylor, and $2,100 for all executive officers as a group. The
Chief Executive Officer did not make any elective contributions
to the 401(k) Plan in fiscal 1998 and, consequently, did not
receive any matching contributions. The Company did not make any
discretionary contributions to the 401(k) Plan for fiscal 1998,
the Transition Period or fiscal 1996. The Company did make a
discretionary contribution for 1995 to the 401(k) Plan of
$383,460.
1991 Stock Option Plan
- ----------------------
The Company's 1991 Stock Option Plan (the "1991 Plan") was
adopted in 1991 and terminated by the Board of Directors as of
February 28, 1995. The termination of the 1991 Plan does not,
however, affect options granted under the 1991 Plan which remain
outstanding. The 1991 Plan was administered by the Stock Option
Committee, which was comprised of Jasper B. Sanfilippo and
Mathias A. Valentine. Messrs. Sanfilippo and Valentine were not
eligible to participate in the 1991 Plan. Effective February 27,
1997, the Stock Option Committee was eliminated and
administration of the 1991 Plan was assumed by the Board of
Directors. An aggregate of 350,000 shares of Common Stock were
available for awards under the 1991 Plan, subject to adjustments
reflecting changes in the Company's capitalization. Options
granted under the 1991 Plan were either incentive stock options
or such other forms of nonqualified stock options as the Stock
Option Committee determined. Incentive stock options granted
under the 1991 Plan were intended to qualify as "incentive stock
options" within the meaning of Section 422 of the Code. The
exercise price of such options was determined by the Stock Option
Committee except that the exercise price of (a) an incentive
stock option granted to an individual who owned (directly or by
attribution under Section 424(d) of the Code) shares possessing
more than 10% of the total combined voting power of all classes
of stock of the Company (a "10% Owner") is at least 110% of the
fair market value (as defined in the 1991 Plan) of a share of
Common Stock on the date the incentive stock option was granted;
(b) an incentive stock option granted to an individual other than
a 10% Owner is at least 100% of the fair market value of a share
of Common Stock on the date the incentive stock option was
granted; and (c) a nonqualified stock option is at least 33% of
the fair market value of a share of Common Stock on the date the
nonqualified stock option was granted. Subject to certain
exceptions, an individual's options expire if the individual's
employment with or service as a director of the Company, as the
case may be, terminates. As of February 28, 1995, the date the
1991 Plan was terminated, the Company had granted options to
purchase a total of 373,000 shares of Common Stock pursuant to
the 1991 Plan (although no more than 350,000 shares of Common
Stock were, at any given time, subject to options granted under
the 1991 Plan). Of these options, 160,651 had been canceled and
2,649 had been exercised as of September 11, 1998 and 202,763
were exercisable on or within 60 days of September 11, 1998 (the
balance of such options, 6,937, becoming exercisable on January
10, 1999).
1995 Equity Incentive Plan
- --------------------------
The Company's 1995 Equity Incentive Plan (the "1995 Plan") was
adopted in 1995 and terminated by the Board of Directors as of
August 27, 1998. The termination of the 1995 Plan does not,
however, affect options granted under the 1995 Plan which remain
outstanding. The purpose of the 1995 Plan was to encourage and
facilitate the acquisition of Common Stock by those key employees
and Outside Directors upon whose judgment and interest the
growth, development and financial success of the Company is
dependent. Subject to antidilution and similar provisions, an
aggregate of 200,000 shares of Common Stock may be issued upon
the exercise of stock options granted under the 1995 Plan. As of
the date the 1995 Plan was terminated, the Company had granted
options to purchase a total of 201,400 shares of Common Stock
under the 1995 Plan (although no more than 200,000 shares of
Common Stock were, at any time, subject to options granted under
the 1995 Plan). Of these options, 40,800 had been canceled as of
September 11, 1998, and 51,950 were exercisable on or within 60
days of September 11, 1998 (the balance of such options becoming
exercisable in various increments over the next three years).
Pursuant to the 1995 Plan, the Board of Directors could select
key employees of the Company to receive awards of stock options,
which could be either nonqualified stock options or "incentive
stock options" within the meaning of Section 422 of the Code, in
consideration for their services. In addition, under the 1995
Plan each Outside Director was granted a nonqualified option to
purchase up to 1,000 shares of Common Stock (i) on the date of
his or her initial election to the Board of Directors, and (ii)
on the date of each subsequent re-election to the Board.
Generally, stock options granted under the 1995 Plan become
exercisable in equal installments of 25% of the shares covered by
the option on the first four anniversaries of the date of grant
subject to, in the case of an employee, continued employment with
the Company or its subsidiaries, or in the case of an Outside
Director, continued service as a director, on such date.
However, all options granted under the 1995 Plan become fully
vested and exercisable on the first date on which no shares of
Class A Stock are outstanding. The exercise price of options
granted to employees under the 1995 Plan was determined by the
Board of Directors; provided, however, that (i) the exercise
price for nonqualified stock options granted to employees was
required to be not less than 50% of the fair market value of a
share of Common Stock on the date of grant, and (ii) the exercise
price for incentive stock options was required to be not less
than 100% of the fair market value of a share of Common Stock on
the date of the grant (110% in the case of incentive stock
options granted to a 10% Owner). The exercise price for each
option granted to an Outside Director under the 1995 Plan was
required to equal 100% of the fair market value for a share of
Common Stock on the date such option was granted. Options
granted under the 1995 Plan may not be assigned or transferred
other than by will or the laws of descent and distribution and
may be exercised during the grantee's lifetime only by the
grantee. No option granted under the 1995 Plan may be exercised
after the expiration of ten years after the date of the grant
(five years in the case of incentive stock options granted to a
10% Owner). Unexercised options terminate upon or within one year
of an employee's termination of employment with the Company.
Option Exercises and Holdings
- -----------------------------
The following table sets forth the certain information regarding
option exercises during fiscal 1998 by each of the Named
Executive Officers and the number and value of securities
underlying options held by each of the Named Executive Officers
at June 25, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
-----------------------------------------------
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised In the Money
Shares Acquired Value Options at Fiscal-Year End(#) Options at Fiscal-Year End($)
Name on Exercise(#) Realized($) Exercisable/Unexercisable Exercisable/Unexercisable
- -------------------- --------------- ----------- ----------------------------- ---------------------------------
<S> <C> <C> <C> <C>
Jasper B. Sanfilippo -- -- -- --
Mathias A. Valentine -- -- -- --
John C. Taylor -- -- 16,875/4,125 --(1)
Steven G. Taylor -- -- 16,875/4,125 --(1)
Gary P. Jensen -- -- 4,250/4,150 --(1)
</TABLE>
(1) The exercise price for each of the exercisable options which
remained unexercised as of June 25, 1998 exceeded the fair
market value of the Common Stock underlying such options at
June 25, 1998.
Employment Contract
- -------------------
Sunshine is a party to an Employment Agreement with Steven G.
Taylor, dated June 17, 1992, pursuant to which Steven G. Taylor is
to be employed as and serve as a Vice President of Sunshine until
June 17, 2000. Steven G. Taylor's annual base compensation under
his employment agreement is $150,000, subject to increase from
time to time in the sole discretion of the Board of Directors of
Sunshine but generally in accordance with Sunshine's customary
practices for increases in base salaries. Under his employment
agreement, Steven G. Taylor is entitled to participate in
employment plans and benefits provided by Sunshine to executive
officers of Sunshine and is also entitled to receive pay
increases, bonuses and stock options comparable to those available
annually to upper level management employees of the Company. In
accordance with the terms of the employment agreement, the Board
of Directors of Sunshine fixed the fiscal 1998 salary for Steven
G. Taylor at $178,153. The Company has guaranteed the performance
of Sunshine under the Employment Agreement.
The Report of the Compensation Committee on Executive Compensation
and the Performance Graph below shall not be deemed incorporated
by reference by any general statement incorporating by reference
this Proxy Statement or any portion hereof into any filing under
the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, and shall not otherwise be deemed filed
under such Acts.
JOINT REPORT OF THE BOARD OF DIRECTORS AND THE COMPENSATION
COMMITTEE ON EXECUTIVE COMPENSATION
-----------------------------------------------------------
Executive Compensation Principles
- ---------------------------------
The Company's Executive Compensation Program is based on
principles designed to align executive compensation with Company
objectives, management initiatives and business financial
performance. These principles are applied by the Board of
Directors and Compensation Committee (and, in the case of Steven
G. Taylor, by the Board of Directors of Sunshine, see "Executive
Compensation-Employment Contract") to:
- -- Attract and retain key executives critical to the success of
the Company and its subsidiaries.
- -- Reward executives for long-term strategic management and the
enhancement of stockholder value.
- -- Support a performance-oriented environment that rewards
performance based on Company goals.
Overview of Executive Compensation Program
- ------------------------------------------
The Company's total compensation program for its executive
officers consists of both cash and, except with respect to the
Chief Executive Officer and the President, equity based
compensation. Each executive officer's annual compensation
consists of a base salary, eligibility for matching and
discretionary contributions to the 401(k) Plan and eligibility for
an annual bonus under the Incentive Bonus Program. In addition,
the Company provides life (including split-dollar life insurance)
and disability insurance for certain executive officers. The
Compensation Committee determines the level of base salary for key
executive officers, including the Chief Executive Officer, and a
base salary range for other executive officers. The Compensation
Committee generally determines such salary or salary range based
on a number of factors and criteria, including the salaries paid
by the Company to its executive officers during the immediately
preceding year, the rate of inflation, the Company's performance
during the immediately preceding fiscal year, the performance of
the executive officer during the immediately preceding fiscal
year, and the salaries paid to the executive officers of certain
other companies engaged in the food or agricultural commodity
business and with annual sales of less than $1.0 billion (the
"Compensation Comparison Group"). The weight and importance given
each year to the foregoing factors, the individual components of
each factor and the decision whether to consider additional
factors, lies within the subjective discretion of the Compensation
Committee. Because the compensation levels of the Company's
executive officers are significantly below compensation levels
that would be affected by the limitations on the deduction of
executive salaries imposed by Section 162(m) of the Code ("Section
162(m)"), the Compensation Committee has not formulated a policy
with respect to Section 162(m). The 1995 Plan provides for
certain limits, consistent with Code Section 162 and the
regulations promulgated thereunder, on the maximum number of
shares of Common Stock subject to options that may be granted to
any grantee in any one calendar year (as will the 1998 Equity
Incentive Plan if approved by the stockholders).
Fiscal 1998 Executive Compensation
- ----------------------------------
In April 1997, the Company changed its fiscal year from a calendar
year to a fiscal year ending on the final Thursday of June each
year. In order to transition from a calendar year to a June
fiscal year, the Company reported financial results for the
twenty-six week period ended June 26, 1997 (the "Transition
Period"). The Company's fiscal 1998 year thus consisted of the
fifty-two week period ended June 25, 1998.
Despite the change in the Company's fiscal year, the base salaries
and salary ranges for the Company's executive officers have
continued to be determined at the first meetings of the
Compensation Committee and Board of Directors of the calendar
year. Accordingly, fiscal 1998 base salaries and salary ranges
include one-half year of amounts set as of the beginning of
calendar 1998.
The Compensation Committee primarily based calendar 1997 and 1998
salaries and salary ranges of the Company's executive officers,
including the Chief Executive Officer, on the salaries paid to
such executive officers in 1996 and 1997, respectively. For
calendar 1997 and 1998, such base salaries and salary ranges were
generally increased by a percentage slightly greater than the
percentage change in the Consumer Price Index in 1996 and 1997,
respectively. The Compensation Committee determined, in general,
not to increase additionally such salaries and salary ranges,
including the salary of the Chief Executive Officer, based on the
Company's performance for 1996 or the Transition Period. The
Compensation Committee did not use the salaries of executive
officers of the Compensation Comparison Group to establish base
salaries and salary ranges for the Company's executive officers,
including the Chief Executive Officer, but did compare its
determination of such salaries and salary ranges against the base
salaries reported for executive officers of the Compensation
Comparison Group as an independent measure of reasonableness. The
calendar 1997 and 1998 base salaries for the Company's executive
officers set by the Compensation Committee were, in general, at
the low to medium ranges when compared to the base salaries of the
Compensation Comparison Group executives. However, the
Compensation Committee does not currently have an established
policy with regard to the salaries and salary ranges of the
Company's executive officers, including the salary of the Chief
Executive Officer, relative to the salaries paid to the
Compensation Comparison Group executive officers.
The Company awards annual bonuses to executive officers of the
Company pursuant to the Incentive Bonus Program. Under the
Incentive Bonus Program, each executive officer receives a set
percentage of his salary as a bonus if the Company's earnings per
share for the prior fiscal year meet or exceed specified levels,
which percentage increases as the Company's earnings per share
increase. The Board of Directors, when it adopted the Incentive
Bonus Program, set the earnings per share targets and salary
percentages for executive officers based on the subjective
judgment of the directors, as well as management's recommendations
regarding a number of factors such as position held and annual
performance. The Company paid bonuses of $61,421 and $161,949, in
the aggregate, to the Company's executive officers for the
Transition Period and fiscal 1998, respectively, pursuant to the
Incentive Bonus Program.
The Company provides long-term incentives to its executive
officers through its stock option plans. Through the award of
stock option grants, the objective of aligning executive officers'
long-range interests with those of the stockholders are met by
providing the executive officers with the opportunity to build a
meaningful stake in the Company. The Stock Option Committee
reviewed and approved the participation of employees of the
Company and its subsidiaries under the 1991 Plan (which was
terminated in February 1995) and the 1995 Plan through February
27, 1997, at which time the Stock Option Committee was eliminated
and its duties and responsibilities under both plans were assumed
by the full Board. The Board did not award any stock options to
executive officers during fiscal 1998. In accordance with the
1995 Plan, options were issued during the Transition Period by the
Board of Directors to certain Company employees, including certain
executive officers. The Board of Directors did not assign any
measurable weighting to any of the factors it considered in
approving these grants of stock options. However, the Board of
Directors did consider and approve the amounts and terms of prior
option awards in determining the recipients of options grants
during the Transition Period. The 1995 Plan was terminated
effective August 27, 1998. Upon approval, the Board may award
stock options under the 1998 Equity Incentive Plan as future
incentives to its executive officers (other than Jasper B.
Sanfilippo and Mathias A. Valentine, who will not be eligible to
participate in the 1998 Equity Incentive Plan).
Executive officers are eligible to participate in the Company's
401(k) Plan, including Company matching and discretionary
contributions to the 401(k) Plan. The Company made no
discretionary contributions to the 401(k) Plan for fiscal 1998 or
the Transition Period; however, the executive officers as a whole
had $2,100 and $2,100 contributed as matching funds under the
401(k) Plan for fiscal 1998 and the Transition Period,
respectively. The Company provides certain executive officers
with life and disability insurance. The Company also maintains
split-dollar life insurance policies on the joint lives of Jasper
B. Sanfilippo and his spouse and Mathias A. Valentine and his
spouse and on the life of John C. Taylor. See "Executive
Compensation - Summary Compensation Table."
The Compensation Committee and the Board of Directors believe that
their respective grants of compensation awards will produce
significant long-term compensation for periods when the Company's
performance objectives are met.
Fiscal 1998 Chief Executive Officer Compensation
- ------------------------------------------------
The Chief Executive Officer's fiscal 1998 base salary increased to
$403,077, which was a percentage increase from his base salary for
the comparable fifty-two week period in 1997 that was slightly
less than the rate of inflation between these comparative periods.
The Compensation Committee based this increase in the Chief
Executive Officer's base salary on the factors and criteria
discussed above with regard to the establishment of calendar 1997
and 1998 base salaries and salary ranges for the Company's
executive officers. The Chief Executive Officer's fiscal 1998
base salary was at the medium range of the base salaries of chief
executive officers of the companies in the Compensation Comparison
Group. William D. Fischer and John W. A. Buyers, as the only non-
employee directors on the Compensation Committee during fiscal
1998, were assisted in establishing the increase in the Chief
Executive Officer's base salary for fiscal 1998 by their broad
knowledge of executive pay practices in the food industry and the
importance to the Company of the services provided by the Chief
Executive Officer. The Chief Executive Officer was awarded a
bonus of $18,000 and $45,995 for the Transition Period and fiscal
1998, respectively, pursuant to the formula established for him
under the Incentive Bonus Program as described above. The Chief
Executive Officer did not participate in the 1991 Stock Option
Plan or the 1995 Equity Incentive Plan. The Chief Executive
Officer will not be eligible to participate in the 1998 Equity
Incentive Plan if the plan is approved by the stockholders. In
fiscal 1998, the Company also provided the Chief Executive Officer
with life insurance and split-dollar life insurance as discussed
above.
Compensation Committee Board of Directors
---------------------- --------------------
Jasper B. Sanfilippo Jasper B. Sanfilippo
Mathias A. Valentine Mathias A. Valentine
William D. Fischer John C. Taylor
John W. A. Buyers Michael J. Valentine
William D. Fischer
John W. A. Buyers
J. William Petty
PERFORMANCE GRAPH
The following Performance Graph compares the Company's cumulative
total stockholder return on its Common Stock for the period from
December 31, 1992 to June 25, 1998 with the cumulative total
return of the Standard & Poor's 500 stock index and a peer group
of companies selected by the Company (the "Peer Group") for
purposes of the comparison and identified below. Dividend
reinvestment has been assumed and, with respect to companies in
the Peer Group, the returns of each such company have been
weighted to reflect relative stock market capitalization.
Comparison of Cumulative Total Return(1)
Among the Company, S&P 500 Index and Peer Group (2)
The following table represents a comparison of the total return among
John B. Sanfilippo & Son, Inc., the S&P 500 and the Peer Group Index:
Dec-92 Dec-93 Dec-94 Dec-95 Dec-96 Jun-97 Jun-98
------ ------ ------ ------ ------ ------ ------
John B. Sanfilippo
& Son, Inc. 100.00 85.57 32.70 54.99 29.73 47.25 28.98
S&P 500 100.00 110.08 111.53 153.45 188.68 246.08 296.14
Peer Group Index 100.00 102.88 87.00 119.23 116.57 163.62 195.39
(1) Assumes $100 invested on December 31, 1992 in the
Company's Common Stock, S&P 500 Index and Peer
Group.
(2) The Peer Group selected by the Company is comprised of
the following companies: Chock Full O'Nuts Corp., J&J Snack
Foods Corp., Universal Foods Corp. and Tootsie Roll
Industries, Inc. ("Tootsie Roll"). The Peer Group was
selected by the Company in good faith based upon similarities
in the nature of the business of the companies, total
revenues, seasonality of business of the companies and market
capitalization.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
-----------------------------------------------------------
The Compensation Committee, which reviews and makes
recommendations to the Board with respect to salaries, bonuses and
other compensation of officers and other executives, was comprised
of Jasper B. Sanfilippo, Mathias A. Valentine, William D. Fischer
and John W. A. Buyers. Mr. Sanfilippo is the Company's Chairman of
the Board and Chief Executive Officer and is a director and Vice
President of Sunshine. Mr. Valentine is the Company's President
and a director and Vice President of Sunshine.
Below is a summary of certain transactions between the Company and
either of Messrs. Sanfilippo or Valentine, or persons with whom
they are related or entities in which they have an interest. All
such transactions have been and will continue to be on terms which
the Company believes to be at least as favorable to the Company as
could be obtained from unaffiliated parties.
Lease Arrangements
- ------------------
The Company leases a warehousing and retail facility in Des
Plaines, Illinois (the "Des Plaines Facility") and its production
and office facilities at 2299 Busse Road, Elk Grove Village,
Illinois (the "Busse Road Facility") from land trusts in which the
direct and indirect beneficiaries are Jasper B. Sanfilippo (a
stockholder, director and executive officer of the Company),
Mathias A. Valentine (a stockholder, director and executive
officer of the Company), their respective spouses, Anne Karacic
and Rose Laketa (sisters of Mr. Sanfilippo) and Rosalie Sanfilippo
(Mr. Sanfilippo's mother). The lease for the Des Plaines Facility
expires on October 31, 2010 and provides for monthly rent of
$21,250, subject to periodic increases based on increases in the
Consumer Price Index (the "CPI") on each of June 1, 2003 and
June 1, 2005. The lease for the Busse Road Facility, as amended,
expires on May 31, 2015 and provides for monthly rent of $84,500,
subject to CPI increases on each of June 1, 2002, June 1, 2007 and
June 1, 2012. Previous amendments to the lease had waived a
scheduled CPI increase in 1995 to June 1, 1997. Effective January
1, 1998, the lease was further amended to waive the June 1997 CPI
adjustment and increase the rent to its current level (from $74,
084 per month). The increase in monthly rent is less than the
increase that would have been implemented if the scheduled CPI
increase had not been waived. The leases for the Des Plaines
Facility and the Busse Road Facility also require the Company to
pay the real estate taxes on, and to maintain and insure, the Des
Plaines Facility and the Busse Road Facility. During fiscal 1998,
the aggregate amount of real estate taxes on and insurance
premiums paid by the Company under both leases was approximately
$301,000.
The Company has constructed an addition to the Busse Road Facility
(the "Addition") which is situated on property owned by the land
trust that owns the Busse Road Facility (the "Busse Land Trust")
and on property owned by the Company. Accordingly, (i) the
Company and the Busse Land Trust entered into a ground lease with
a term beginning January 1, 1995 pursuant to which the Company
leases from the Busse Land Trust the land on which a portion of
the Addition is situated and all related improvements thereon (the
"Busse Addition Property"), and (ii) the Company, the Busse Land
Trust and the sole beneficiary of the Busse Land Trust entered
into a party wall agreement effective as of January 1, 1995, which
sets forth the respective rights and obligations of the Company
and the Busse Land Trust with respect to the common wall which
separates the existing Busse Road Facility and the Addition. The
ground lease has a term which expires on May 31, 2015 (the same
date on which the Company's lease for the Busse Road Facility
expires) and requires the Company to pay the Busse Land Trust
annual rent of $6,425, subject to CPI increases on each of June 1,
2000, June 1, 2005 and June 1, 2010. The Company has an option to
extend the term of the ground lease for one five-year term, an
option to purchase the Busse Addition Property at its then
appraised fair market value at any time during the term of the
ground lease, and a right of first refusal with respect to the
Busse Addition Property. The ground lease also requires the
Company to pay the real estate taxes on, and to insure the Busse
Addition Property. The party wall agreement grants the Company
the right to use and the obligation to participate pro rata with
the Busse Partnership (defined below) in the maintenance of the
common wall shared by the Addition and Busse Road Facility.
The sole beneficiary of the Busse Land Trust is the Arthur/Busse
Limited Partnership (the "Busse Partnership"). The general
partner of the Busse Partnership is Arthur/Busse Properties, Inc.
The shareholders of Arthur/Busse Properties, Inc. and the limited
partners of the Busse Partnership are Jasper B. Sanfilippo, Marian
Sanfilippo (Mr. Sanfilippo's wife), Mathias A. Valentine, Mary
Valentine (Mr. Valentine's wife), Anne Karacic and Rose Laketa
(sisters of Mr. Sanfilippo), and Rosalie Sanfilippo
(Mr. Sanfilippo's mother).
Supplier, Vendor, Broker and Other Arrangements
- -----------------------------------------------
During fiscal 1998, the Company purchased $2.62 million of
products and services from Navarro Pecan Company, Inc.,
("Navarro") a processor of pecans, and sold approximately $2.99
million of products and services to Navarro. The Company
anticipates that it will continue to make such purchases from and
sales to Navarro in fiscal 1999 and thereafter. Jasper B.
Sanfilippo, a stockholder, director and executive officer of the
Company, also serves as a director and officer of Navarro. In
addition, Mr. Sanfilippo owns 33-1/3% of the outstanding common
stock of Navarro. The remaining two-thirds of the outstanding
common stock of Navarro is owned by unaffiliated parties.
During fiscal 1998, the Company purchased approximately $6.25
million of raw materials from an entity in respect of which Mr.
Sanfilippo serves as a director and owns 50% of the outstanding
common stock.
During fiscal 1998, the Company purchased $503,855 of
manufacturing equipment (such as canning and packaging machinery),
engineering services and inventory from JesCorp, Inc. and MAP
Systems International, a division of JesCorp, Inc. ("JesCorp").
The Company anticipates that it will continue to make such
purchases of products and services from JesCorp in fiscal 1999 and
thereafter. James J. Sanfilippo and John Sanfilippo are the
stockholders, directors and officers of JesCorp and are employees
(James Sanfilippo is an executive officer) and stockholders of the
Company and sons of Jasper B. Sanfilippo, a stockholder, director
and executive officer of the Company. Marian Sanfilippo, Jasper B.
Sanfilippo's wife and a beneficial owner of more than 5% of the
Company's outstanding Class A Stock, is also a director of
JesCorp. During fiscal 1998, JesCorp subleased from the Company
approximately 17,481 square feet of space at the Company's
facilities and paid rent for this space at the rate of $8,168 per
month. JesCorp subleased additional space beginning July 1,
1998. This brought the total space subleased to JesCorp to
approximately 26,820 square feet for which JesCorp is paying
$11,976 of rent per month. This amount is equal to the amount
paid by the Company in respect of such space (inclusive of taxes).
JesCorp's lease will expire December 31, 2000.
During fiscal 1998, Gibson Specialty Corporation ("Gibson") rented
approximately 11,605 square feet of space from the Company for
$5,423 per month in rent under an oral month-to-month lease
arrangement. Effective July 1, 1998, Gibson reduced the space
rented to 8,000 square feet and is paying $3,577 per month in rent
under this same month-to-month arrangement. Gibson's rent is and
has been equal to the amount paid by the Company in respect of
such space (inclusive of taxes). Gibson is 60% owned by Jerome
Evon, the son-in-law of Jasper B. Sanfilippo. The remaining 40% of
Gibson is owned by unaffiliated parties.
During fiscal 1998, the Company compensated the following
employees who are related to directors or executive officers of
the Company. Jeffrey T. Sanfilippo, Vice President of Sales and
Marketing, is the son of Jasper B. Sanfilippo, Chairman of the
Board and Chief Executive Officer, and the brother of James J.
Sanfilippo and Jasper B. Sanfilippo, Jr., both of whom are
executive officers of the Company. Jeffrey T. Sanfilippo's total
compensation for fiscal 1998 was $136,795. James A. Valentine,
Vice President of Management Information Systems, is the son of
Mathias A. Valentine, President and a Director of the Company and
the brother of Michael J. Valentine, a Director and an executive
officer of the Company. James A. Valentine's total compensation
for fiscal 1998 was $96,433. John C. Taylor Jr., former Vice
President of Sales and Marketing Consumer Products, is the son of
John C. Taylor, a Director and executive officer of the Company.
John C. Taylor Jr. resigned from the Company on June 1, 1998. His
total compensation for fiscal 1998 was $97,664.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
Effective June 1, 1998 the Company entered into a three-year
agreement with Compass Sales and Marketing ("Compass") to act as
a broker for the Company. John C. Taylor Jr., a former employee
of the Company and the son of John C. Taylor, a director and
executive officer of the Company, is the president of Compass. In
their capacity as broker, Compass makes customer calls, manage
brokers, provide retail services and provide information services.
Compass is paid for their service on terms substantially
equivalent to the terms on which other brokers utilized by the
Company are paid. As of the date of this Proxy Statement, the
Company has paid Compass a total of $53,538 during fiscal 1999 for
services rendered under this agreement.
PROPOSAL TO APPROVE THE ADOPTION OF
THE 1998 EQUITY INCENTIVE PLAN
-----------------------------------
At the annual meeting, the stockholders of the Company will be
asked to consider and approve the 1998 Equity Incentive Plan, to
be effective as of September 1, 1998 (the "Effective Date").
The 1998 Equity Incentive Plan is intended to replace the 1995
Plan, which was terminated by the Board of Directors as of August
27, 1998, provided, however, that unexercised stock options that
are outstanding under the 1995 Plan will continue to be governed
by the provisions of the 1995 Plan.
Required Vote
- -------------
The Board of Directors recommends a vote "FOR" the approval of
the 1998 Equity Incentive Plan.
Mrs. Marian Sanfilippo and Messrs. Jasper B. Sanfilippo, Mathias
A. Valentine and Michael J. Valentine, who, collectively and in
the aggregate have voting control over approximately 87.0% of the
combined voting power of the Company's capital stock issued and
outstanding as of September 11, 1998, have advised the Company
that they intend to vote all of their shares of the Company in
favor of the proposal. Passage of this proposal requires the
affirmative vote of the holders of shares representing a majority
of the votes entitled to be cast by the holders of shares present
and entitled to vote at the Annual Meeting.
The following constitutes a brief discussion of the material
features of the 1998 Equity Incentive Plan and is qualified in its
entirety by reference to the copy of the 1998 Equity Incentive
Plan that is attached as Exhibit A to this Proxy Statement.
The Company had an aggregate of 550,000 shares of Common Stock
reserved for issuance in respect of stock options outstanding
under the 1991 Plan and the 1995 Plan. These plans were
terminated by the Company's Board of Directors on February 28,
1995 and August 27, 1998, respectively. Unexercised options to
purchase 370,300 shares of Common Stock previously awarded under
the 1991 Plan and the 1995 Plan remain outstanding as of September
11, 1998 and will continue to be governed by the terms of the 1991
Plan and the 1995 Plan, respectively. The Company believes that
it would be appropriate and beneficial to adopt the 1998 Equity
Incentive Plan to replace the 1995 Plan (which replaced the 1991
Plan). Under the 1998 Equity Incentive Plan the Company will be
authorized to grant options to purchase up to 350,000 shares of
Common Stock, which shares shall be reserved for issuance under
the 1998 Equity Incentive Plan. Accordingly, upon approval of the
1998 Equity Incentive Plan, a total of 720,300 shares of Common
Stock are or will be reserved subject to issuance upon exercise of
options granted under the 1991 Plan, the 1995 Plan or the 1998
Equity Incentive Plan.
Purpose of the 1998 Equity Incentive Plan
- -----------------------------------------
The purpose of the 1998 Equity Incentive Plan is to increase the
ownership of Common Stock of the Company by those key employees
(including officers and certain directors who are also officers)
and Outside Directors who contribute to the continued growth,
development and financial success of the Company and its
subsidiaries, and to attract and retain key employees and reward
them for the Company's profitable performance.
Number of Shares Authorized
- ---------------------------
The 1998 Equity Incentive Plan provides that an aggregate of
350,000 authorized but unissued shares of Common Stock of the
Company will be available for awards in the form of stock options,
including options intended to qualify as "incentive stock
options" within the meaning of Section 422 of the Code and
nonqualified stock options. Such number of authorized but
unissued shares of Common Stock will be reduced by the aggregate
number of shares of Common Stock acquired from time to time to be
held as treasury shares reserved for use under 1998 Equity
Incentive Plan. The aggregate number of shares of Common Stock
available under the 1998 Equity Incentive Plan will be subject to
adjustment to reflect certain subsequent stock changes such as
stock dividends, stock splits and recapitalizations. If any
outstanding stock option under the 1998 Equity Incentive Plan
expires or is terminated for any reason before the end of the term
of the 1998 Equity Incentive Plan, the shares covered by the
expired or terminated stock option may be used to grant new stock
options under the 1998 Equity Incentive Plan. As of September 9,
1998 the closing sales price of the Company's Common Stock (as
reported on the Nasdaq National Market System) was $4.75.
Administration
- --------------
The 1998 Equity Incentive Plan will be administered by the entire
Board of Directors, unless a committee is subsequently appointed
by the Board for that purpose.
Eligibility
- -----------
Stock options may be granted to any person designated by the Board
of directors to be an employee of the Company or any of its
subsidiaries (currently approximately 1,700 individuals) or to any
Outside Director; provided, however, that Jasper B. Sanfilippo,
the Company's Chairman of the Board and Chief Executive Officer,
and Mathias A. Valentine, the Company's President, are not
eligible to participate in the 1998 Equity Incentive Plan.
Employees may be granted incentive stock options and nonqualified
stock options. Outside Directors (currently three individuals)
are only eligible to receive nonqualified stock options granted in
accordance with the formula provided by the 1998 Equity Incentive
Plan.
Terms of Grant
- --------------
The term of each stock option granted under the 1998 Equity
Incentive Plan will be for a period of not more than 10 years from
the date of the grant (five years in the case of incentive stock
options granted to a person owning more than 10% of the voting
power of the Company), and will be subject to earlier termination
as provided in the 1998 Equity Incentive Plan. To the extent not
set forth in the 1998 Equity Incentive Plan, the terms and
conditions of each grant of stock options will be set forth in a
written agreement between the Company and the grantee thereof.
Grant of Stock Options
- ----------------------
Generally, each grant of stock options will become exercisable in
equal installments of 25% of the shares covered by the option on
the first four anniversaries of the date of grant subject to, in
the case of an employee, continued employment with the Company, or
in the case of an Outside Director, continued service as a
director, on such date. Each option will be evidenced by a written
stock option agreement which will contain such terms and
conditions as determined by the Board of Directors in accordance
with the 1998 Equity Incentive Plan. The Board of Directors will
determine the per share purchase price of the Common Stock subject
to stock options (the "Option Price"). The Option Price for
nonqualifying options may not be less than 50% of the Fair Market
Value (as defined below) per share of Common Stock on the date of
grant. In the case of incentive stock options, the Option Price
may not be less than 100% of the Fair Market Value per share of
Common Stock on the date of the grant; provided, however, that in
the case of a grant of an incentive stock option to an employee
who is a holder of more than 10% of the voting power of the
Company's capital stock, the Option Price may not be less than
110% of the Fair Market Value per share of Common Stock on the
date of grant. The Option Price of any shares of Common Stock as
to which an option may be exercised must be paid in full at the
time of exercise, unless the option grant permits the grantee to
deliver a promissory note as partial payment. Payment may, at the
election of the grantee and to the extent not made pursuant to
such a promissory note, be made in (a) cash, (b) shares of Common
Stock valued at their aggregate Fair Market Value on the date of
exercise, (c) surrender of an exercisable option covering shares
of Common Stock with an aggregate Fair Market Value as of the date
of exercise in excess of the aggregate dollar amount of the Option
Prices of such shares under such option equal to the Option Price
of the options sought to be exercised, (d) through delivery of
irrevocable instructions to a broker to deliver promptly to the
Company of an amount of cash equal to the Option Price, (e) any
combination of the foregoing or (f) in accordance with the term of
an individual's option agreement. The Board of Directors may
provide that if a grantee delivers shares of Common Stock in full
or partial payment of the Option Price, the grantee will be
granted a "reload stock option" to purchase the number of shares
of Common Stock so delivered by the grantee. The "Fair Market
Value" of a share of Common Stock is generally determined under
the plan by reference to the last closing sales price for the
Common Stock as reported on the Nasdaq National Market.
Grant of Nonqualified Stock Options to Outside Directors
- --------------------------------------------------------
Each individual who is elected an Outside Director after the
Effective Date will on the date of his or her election to the
Company's Board and on each date of his or her re-election,
automatically be granted a non-qualified option to purchase 1,000
shares of Common Stock. The price of the shares subject to each
option granted to an Outside Director will be 100% of the Fair
Market Value for such shares on the date such option is granted.
Outside Directors shall not be eligible for any other option
grants pursuant to the 1998 Equity Incentive Plan.
Options Nonassignable
- ---------------------
Options granted under the 1998 Equity Incentive Plan may not be
assigned or transferred other than by will or the laws of descent
and distribution and may be exercised during the grantee's
lifetime only by the grantee.
Effect of Change of Control
- ---------------------------
Notwithstanding any other provisions of the 1998 Equity Incentive
Plan, all options granted under the 1998 Equity Incentive Plan
become fully vested and exercisable commencing on the date of a
"Change of Control", which is defined in the 1998 Equity
Incentive Plan as the date on which no shares of Class A Stock
remain outstanding; provided, however, that the Company may cancel
all such options under the 1998 Equity Incentive Plan as of the
date of a Change of Control by giving notice to each grantee
thereof of its intention to do so and by fully vesting all such
options and permitting the purchase during the 30-day period
immediately preceding such Change of Control date of all of shares
of Common Stock subject to such outstanding options.
Termination of Employment
- -------------------------
An unexercised option will terminate upon an employee's
termination of employment if the termination of employment was the
result of the resignation of the employee or the termination of
the employee for cause (as defined in the 1998 Equity Incentive
Plan) and otherwise, except that; if the grantee's employment is
terminated by the death of the grantee, unexercised options, to
the extent exercisable on the date of the grantee's death, may be
exercised, in whole or in part, at any time within one year after
the date of death by the grantee's personal representative or by
the person to whom the option is transferred by will or the
applicable laws of descent and distribution; if the grantee's
employment is terminated as a result of retirement under the
provisions of a retirement plan of the Company or any of its
subsidiaries applicable to the grantee (or on or after age 60 if
no retirement plan of the Company or its subsidiaries is
applicable to the grantee), any unexercised option, to the extent
exercisable at the date of such termination of employment, may be
exercised, in whole or in part, at any time within 90 days after
the date of such termination of employment; if the grantee's
employment is terminated as a result of the permanent disability
of the grantee, any unexercised option, to the extent exercisable
at the date of such termination of employment, may be exercised,
in whole or in part, at any time within one year after the date of
such termination of employment; or if the grantee's employment is
terminated for any reason other than by death, retirement,
permanent disability, resignation or for cause, any unexercised
option to the extent excisable on the date of such termination of
employment, may be exercised, in whole or in part, at any time
within three months from the date of such termination of
employment.
Intent to Comply with Section 16 of the Securities Exchange Act of 1934
- -----------------------------------------------------------------------
With respect to those persons who, for purposes of Section 16 of
the Securities Exchange Act of 1934, are treated as officers,
directors, or beneficial owners of more than 10% of the Common
Stock of the Company, transactions under the 1998 Equity Incentive
Plan are intended to comply with all applicable conditions of Rule
16b-3 (which relates to transactions which may be deemed exempt
under Section 16(b) of the Securities Exchange Act of 1934) under
the Securities Exchange Act of 1934, as amended, or any similar
successor provisions. To the extent any provision of the 1998
Equity Incentive Plan or action by the Board fails to so comply,
it will be deemed null and void, to the extent permitted by law
and deemed advisable by the Board.
Amendment of the Plan
- ---------------------
The Board may make such modifications of the 1998 Equity Incentive
Plan as it may deem advisable but may not, without further
approval of the stockholders of the Company, except as otherwise
provided in the 1998 Equity Incentive Plan: materially increase
the benefits accruing to participants under the 1998 Equity
Incentive Plan; materially increase the number of shares of Common
Stock reserved for issuance under the 1998 Equity Incentive Plan;
materially modify the requirements as to eligibility for
participation in the 1998 Equity Incentive Plan; or extend the
date of termination of the 1998 Equity Incentive Plan.
Notwithstanding the foregoing, the provisions in the 1998 Equity
Incentive Plan relating to the grant of stock options to Outside
Directors pursuant to a formula may not be amended more than once
every six months, other than to comport with changes in the Code,
the Employee Retirement Income Security Act of 1974, as amended,
or the rules thereunder.
Termination of the Plan
- -----------------------
The 1998 Equity Incentive Plan will terminate on the tenth
anniversary of the Effective Date or at such earlier time as the
Board may determine. Any termination, whether in whole or in
part, will not affect any option then outstanding under the 1998
Equity Incentive Plan.
Certain Federal Income Tax Consequences
- ---------------------------------------
The following is a brief summary of the significant aspects of
current federal income tax treatment of the stock options that may
be granted under the 1998 Equity Incentive Plan. This summary
does not cover the federal tax effects if the described conditions
are not met.
The grant of a stock option will not result in tax consequences to
the Company or the participant. Upon the exercise of an option
and the transfer to the grantee of shares, the tax treatment
depends upon whether the option is a nonqualified option or an
incentive stock option. When a nonqualified option is exercised,
the grantee will realize compensation taxable as ordinary income
in an amount equal to the difference between the option price and
the fair market value of the shares on the date of exercise, and
the Company will have deductible expense in the same amount. The
grantee's basis in such shares will generally be their fair market
value on the date of exercise. When the grantee disposes of such
shares, the difference between the amount received and the fair
market value of the shares on the date of exercise will be treated
as long-term or short -term capital gain or loss, depending upon
the holding period of the shares.
When an incentive stock option is exercised, the grantee will not
realize any income and the Company will not be allowed any
deduction if certain conditions regarding the holding period of
the option and the option stock are met. The basis to the grantee
of shares acquired upon the exercise of an incentive stock option
will be the exercise price. In the event of a sale of the stock
after compliance with these conditions, the resulting gain or loss
will ordinarily be treated as long-term capital gain or loss.
If the grantee fails to comply with the holding period conditions,
the grantee is taxed as if he or she had exercised a nonqualified
option, and the Company will have a deductible expense upon
exercise equal to the compensation income recognized by the
grantee. Any gain in excess of the amount treated as compensation
will be treated as long-term or short-term capital gain depending
on the length of time the grantee had held the stock at the time
of disposition.
The 1998 Equity Incentive Plan is not intended to qualify under
Section 401(a) of the code.
RATIFY APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP
AS INDEPENDENT ACCOUNTANTS
------------------------------------------------
The stockholders will be asked to ratify the appointment of the firm
of PricewaterhouseCoopers LLP as the Company's independent
accountants for the fiscal year ending June 24, 1999. This
appointment was made by the Board of Directors on recommendation of
its Audit Committee.
PricewaterhouseCoopers LLP served as independent accountants for the
fiscal year ended June 25, 1998 and it (or its predecessor by
merger, Price Waterhouse LLP) has acted as accountants for the
Company since 1982. Representatives of PricewaterhouseCoopers LLP
are expected to be present at the Annual Meeting with the
opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.
The Board of Directors recommends a vote "FOR" ratification of the
appointment of PricewaterhouseCoopers LLP as independent accountants
for the fiscal year ending June 24, 1999.
The affirmative vote of the holders of shares representing a
majority of the votes entitled to be cast by the holders of shares
present and entitled to vote at the Annual Meeting is required for
ratification of this item. No determination has been made as to
what action the Board of Directors would take if the appointment is
not ratified.
ANNUAL REPORT
-------------
The Company's annual report for the fiscal year ended June 25, 1998
has been included in the mailing of this Proxy Statement.
Stockholders are referred to the report for financial and other
information about the Company, but such report is not incorporated
in this Proxy Statement and is not to be deemed a part of the proxy
soliciting material.
STOCKHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
-------------------------------------------------
Any stockholder proposal to be considered for inclusion in the proxy
materials for the Company's 1999 annual meeting of stockholders must
be received at the principal executive offices of the Company no
later than May 18, 1999 and must otherwise comply with the
requirements of Rule 14a-8 under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
On May 21, 1998, the Securities and Exchange Commission adopted an
amendment to Rule 14a-4, as promulgated under the Securities
Exchange Act of 1934. The amendment to 14a-4(c)(1) governs the
Company's use of its discretionary proxy voting authority with
respect to a stockholder proposal which the stockholder has not
sought to include in the Company's proxy statement. The new
amendment provides that if a proponent of a proposal fails to notify
the Company at least 45 days prior to the month and day of mailing
of the prior year's proxy statement, then the management proxies
will be allowed to use their discretionary voting authority when the
proposal is raised that the meeting, without any discussion of the
matter in the proxy statement. With respect to the Company's 1999
annual meeting of stockholders, if the Company is not provided
notice of a stockholder proposal which the stockholder has not
previously sought to include in the Company's proxy statement by
August 1, 1999, the management proxies will be allowed to use their
discretionary authority as outlined above.
PROXY SOLICITATION
------------------
Proxies will be solicited by mail. Proxies may also be solicited by
directors, officers and a small number of regular employees of the
Company personally or by mail, telephone or telegraph, but such
persons will not be specially compensated for such services.
Brokerage houses, custodians, nominees and fiduciaries will be
requested to forward the soliciting material to the beneficial
owners of stock held of record by such persons, and the Company will
reimburse them for their expenses in doing so. The entire cost of
the preparation and mailing of this Proxy Statement and accompanying
materials and the related proxy solicitation will be borne by the
Company.
OTHER MATTERS
-------------
Management does not intend to present, and does not have any reason
to believe that others will present, any item of business at the
Annual Meeting other than those specifically set forth in the notice
of the Annual Meeting. However, if other matters are properly
presented for a vote, the proxies will be voted for such matters in
accordance with the judgment of the persons acting under the
proxies.
By Order of the Board of Directors
/s/ MICHAEL J. VALENTINE
------------------------
MICHAEL J. VALENTINE
Secretary
Elk Grove Village, Illinois
September 15, 1998
EXHIBIT A
- ----------
THE JOHN B. SANFILIPPO & SON, INC.
1998 EQUITY INCENTIVE PLAN
- ----------------------------------
John B. Sanfilippo & Son, Inc. (the "Company") hereby
establishes The John B. Sanfilippo & Son, Inc. 1998 Equity
Incentive Plan (the "Plan"), to become effective September 1, 1998
(the "Effective Date"), subject to approval by the holders of a
majority of the combined voting power of the Common Stock, $.01 par
value, of the Company ("Common Stock") and Class A Common Stock,
$.01 par value, of the Company ("Class A Stock") present, or
represented, and entitled to vote at a meeting duly called and
held. Grants may be made hereunder prior to such stockholder
approval, provided that any such grants shall be subject to such
stockholder approval.
1. Definitions.
In this Plan, except where the context otherwise indicates,
the following definitions apply:
1.1. "Agreement" means a written agreement implementing a
grant of an Option.
1.2 "Board" means the Board of Directors of the Company.
1.3 "Change in Control" shall have the meaning set forth in
Subsection 15.1 hereof.
1.4 "Class A Stock" means the Class A Common Stock, $.01 par
value per share, of the Company.
1.5 "Code" means the Internal Revenue Code of 1986, as
amended.
1.6 "Committee" means the entire Board or any committee of
the Board appointed by the Board to administer the Plan,
meeting the standards of Rule 16b-3(d)(1) under the Exchange
Act, or any similar successor rule and Temp. Treas. Reg.
Section 1.162-27(e)(3) or any similar successor rule. Unless
otherwise determined by the Board, the entire Board shall be
the Committee and shall administer the Plan.
1.7 "Common Stock" means the Common Stock, par value $.01 per
share, of the Company, and any other shares into which such
common stock shall thereafter be exchanged by reason of a
recapitalization, merger, consolidation, split-up,
combination, exchange of shares or the like.
1.8. "Company" means John B. Sanfilippo & Son, Inc., a
Delaware corporation, its successors and assigns.
1.9. "Current Grant" shall have the meaning set forth in
Subsection 6.4(e) hereof.
1.10. "Date of Exercise" means the date on which the
Company receives notice of the exercise of an Option in
accordance with the terms of Section 8 hereof.
1.11. "Date of Grant" means the date on which an Option is
granted by the Committee (or such later date as specified in
advance by the Committee) or, in the case of a Nonstatutory
Stock Option granted to an Outside Director, the date on which
such Nonstatutory Stock Option is granted pursuant to and in
accordance with the provisions of Section 10 hereof.
1.12. "Effective Date" means September 1, 1998, subject to
approval by the holders of the combined voting power of the
Common Stock and Class A Stock present, or represented, and
entitled to vote at a meeting duly called and held.
1.13. "Employee" means any person determined by the
Committee to be an employee of the Company or any Subsidiary.
1.14. "Exchange Act" means the Securities Exchange Act of
1934, as amended.
1.15. "Fair Market Value" of a Share means:
(a) If on the applicable date the Common Stock is
listed for trading on a national or regional securities exchange
or authorized for quotation on the Nasdaq National Market System,
the closing price of the Common Stock on such exchange or Nasdaq
National Market System, as the case may be, on the applicable date,
or if no sales of Common Stock shall have occurred on such exchange
or Nasdaq National Market System, as the case may be, on the
applicable date, the closing price of the Common Stock on the next
preceding date on which there were such sales;
(b) If on the applicable date the Common Stock is not
listed for trading on a national or regional securities
exchange or authorized for quotation on the Nasdaq National
Market System, the mean between the closing bid price and the
closing ask price of the Common Stock as otherwise reported by
the Nasdaq Stock Market, Inc. with respect to the applicable
date or, if closing bid and ask prices for the Common Stock
shall not have been so reported with respect to the applicable
date, on the next preceding date with respect to which such
bid and ask prices were so reported; or
(c) If on the applicable date the Common Stock is not
listed for trading on a national or regional securities
exchange or authorized for quotation on the Nasdaq National
Market System or otherwise reported by the Nasdaq Stock
Market, Inc., the fair market value of a Share as determined
by the Committee pursuant to a reasonable method adopted in
good faith for such purpose.
Such Fair Market Value shall be subject to adjustment as
provided in Section 23 hereof.
1.16. "For Cause" shall have the meaning set forth in
Subsection 14.2 hereof.
1.17. "Incentive Stock Option" means an Option granted
under the Plan that qualifies as an incentive stock option
under Section 422 of the Code and that the Company designates
as such in the Agreement granting the Option.
1.18. "Insider" means a director, officer or beneficial
owner of more than 10% of the Common Stock of the Company for
purposes of Section 16 of the Exchange Act.
1.19. "Nonstatutory Stock Option" means an Option granted
under the Plan that is not an Incentive Stock Option.
1.20. "Option" means a right to purchase Common Stock
granted under the Plan in accordance with the terms of either
Section 6 or Section 10 hereof.
1.21. "Optionee" means an Outside Director or an Employee
to whom an Option has been granted.
1.22. "Option Period" means the period during which an
Option may be exercised.
1.23. "Option Price" means the price per Share at which an
Option may be exercised. The Option Price shall be determined
by the Committee in accordance with the terms and conditions
of the Plan, except that, in the case of Nonstatutory Stock
Options granted to Outside Directors pursuant to the
provisions of Section 10, in no event shall the Option Price
be less than 100% of the Fair Market Value per Share
determined as of the Date of Grant.
1.24. "Other Plans" shall have the meaning set forth in
Subsection 6.4(d) hereof.
1.25. "Outside Director" means any person who is a
director of the Company and who is not also an employee of
either the Company, any Subsidiary or any of their respective
affiliates.
1.26. "Permanent Disability" means a mental or physical
condition which, in the opinion of the Committee, renders an
Optionee unable or incompetent to carry out the job
responsibilities which such Optionee held or tasks to which
such Optionee was assigned at the time the disability was
incurred and which is expected to be permanent or for an
indefinite period.
1.27. "Plan" means The John B. Sanfilippo & Son, Inc. 1998
Equity Incentive Plan.
1.28. "Prior Grants" shall have the meaning set forth in
Subsection 6.4(e) hereof.
1.29. "Reload Option" means a new Option granted to an
Optionee pursuant to and in accordance with Subsections
4.3(f)(v) and 8.2 hereof, upon the surrender of Shares to pay
the Option Price of a previously granted Option.
1.30 "Share" means a share of Common Stock.
1.31. "Share Withholding" shall have the meaning set forth
in Subsection 13.1 hereof.
1.32. "Subsidiary" means a corporation at least 50% of the
total combined voting power of all classes of stock of which
is owned by the Company either directly or through one or more
Subsidiaries.
1.33. "Ten Percent Owner" shall have the meaning set forth
in Subsection 6.4(a) hereof.
1.34. "Termination of Employment" shall have the meaning
set forth in Subsection 14.1 hereof.
1.35. "$100,000 Limit" shall have the meaning set forth in
Subsection 6.4(d) hereof.
2. Purpose.
The purpose of the Plan is to advance the interests of
the Company and its Subsidiaries by encouraging and
facilitating the acquisition of a larger personal financial
interest in the Company by Outside Directors and those
Employees upon whose judgment and interest the Company and its
Subsidiaries are largely dependent for the successful conduct
of their operations, and by making executive positions in the
Company and its Subsidiaries more attractive. It is
anticipated that the acquisition of such financial interest
will stimulate the efforts of such Employees and Outside
Directors on behalf of the Company and its Subsidiaries and
strengthen their desire to continue in the service of the
Company and its Subsidiaries. It is also anticipated that the
opportunity to obtain such a financial interest will prove
attractive to promising executive talent and will assist the
Company and its Subsidiaries in attracting such persons. The
Plan is intended to meet the requirements of Rule 16b-3 of the
Exchange Act at all times during which Insiders are subject to
the requirements of Section 16 of the Exchange Act.
3. Scope of the Plan.
3.1. Shares Available. An aggregate of 350,000 Shares is
hereby authorized and made available and shall be reserved for
issuance under the Plan with respect to the exercise of
Options. Such number of Shares shall be reduced by the
aggregate number of Shares acquired from time to time to be
held as treasury Shares reserved for use under the Plan.
Subject to the foregoing and the other provisions of this
Section 3, Shares that are issued upon the exercise of Options
awarded under the Plan may be issued out of either the
Company's authorized and unissued or treasury shares of Common
Stock. The aggregate number of Shares available under this
Plan shall be subject to adjustment upon the occurrence of any
of the events and in the manner set forth in Section 23
hereof.
3.2. Shares Subject to Terminated Options. If, and to the
extent, an Option shall expire or terminate for any reason
without having been exercised in full, the Shares subject
thereto which have not become outstanding shall (unless the
Plan shall have terminated) become available under the Plan
for other grants.
3.3 Authority to Purchase Shares. The Board, such committee
of the Board that the Board shall specifically authorize or
direct on its behalf, or the Committee shall have the
authority to cause the Company to purchase from time to time,
in such amounts and at such prices as the Board, in its
discretion, shall deem advisable or appropriate, Shares to be
held as treasury Shares and reserved and used solely for or in
connection with grants under the Plan, at the discretion of
the Committee.
4. Administration.
4.1. The Committee. The Plan shall be administered by the
Committee.
4.2. Authority of the Committee. The Committee shall have
full and final authority, in its discretion, but subject to
the express provisions of the Plan, as follows:
(a) to grant Options;
(b) subject to Sections 6 and 10, to determine (a) the
Option Price of the Shares subject to each Option, (b) the
Employees and Outside Directors to whom, and the time or times
at which, Options shall be granted, and (c) subject to
Section 3, the number of Shares subject to an Option to be
granted to each Optionee thereof;
(c) to determine all other terms and provisions of each
Agreement (which may, but need not be, identical), other than
the exercisability of Options which is governed by
Subsection 6.2 hereof, and, with the consent of the Optionee,
to modify any Agreement;
(d) to construe and interpret the Plan and Agreements;
(e) to prescribe, amend and rescind rules and
regulations relating to the Plan, including, without
limitation and subject to Section 14 hereof, the rules with
respect to the exercisability of Options;
(f) to require, whether or not provided for in the
pertinent Agreement, of any person exercising an Option, at
the time of such exercise, the making of any representations
or agreements which the Committee may deem necessary or
advisable in order to comply with the securities laws of the
United States of America or of any state;
(g) to prescribe the method by which grants of Options
shall be evidenced;
(h) to cancel, with the consent of the Optionee thereof,
outstanding Options and to grant new Options in substitution
therefor;
(i) to require withholding from or payment by an
Optionee of any federal, state or other governmental taxes;
(j) to prohibit the election described in Section 11
hereof;
(k) to make all other determinations deemed necessary or
advisable for the administration of the Plan; and
(l) to impose such additional conditions, restrictions
and limitations upon the exercise, vesting or retention of
Options as the Committee may, prior to or concurrently with
the grant or award thereof, deem appropriate, including, but
not limited to, limiting the percentage of Options which may
from time to time be exercised by an Optionee.
4.3. Agreements Evidencing Stock Options.
(a) Options awarded under the Plan shall be evidenced by
Agreements which shall not be inconsistent with the terms and
provisions of the Plan, and which shall contain such
provisions as the Committee may in its sole discretion deem
necessary or desirable. Without limiting the generality of
the foregoing, the Committee may in any Agreement impose such
restrictions or conditions upon the exercise of such Option or
upon the sale or other disposition of the shares of Common
Stock issuable upon exercise of such Option as the Committee
may in its sole discretion determine. By accepting an award
pursuant to the Plan each Optionee shall thereby agree that
each such award shall be subject to all of the terms and
provisions of the Plan, including, but not limited to, the
provisions of Section 4.6.
(b) Each Agreement shall set forth the number of shares
of Common Stock subject to the Option granted thereby, subject
to adjustment by the Committee to reflect changes in
capitalization as contemplated by Section 23.
(c) Each Agreement relating to Options shall set forth
the amount payable by the Optionee to the Company upon
exercise of the Option evidenced thereby, subject to
adjustment by the Committee to reflect changes in
capitalization as contemplated by Section 23.
(d) Each Agreement shall set forth the period during
which the Option shall be exercisable, which shall be
determined by the Committee in its discretion, subject to the
terms of Subsection 6.4(b) and Section 10 hereof; provided,
however, that no Option shall be exercisable after the
expiration of ten (10) years from the Date of Grant, and each
Option shall be subject to earlier termination as herein
provided.
(e) Each Agreement shall specify whether the Option is a
Nonstatutory Stock Option or an Incentive Stock Option.
(f) Without limiting the foregoing, the Committee shall
provide, in its discretion, in any Agreement:
(i) for an agreement by the Optionee to render
services to the Company or a Subsidiary upon such terms
and conditions as may be specified in the Agreement,
provided that the Committee shall not have the power to
commit the Company or a Subsidiary to employ or otherwise
retain any Optionee;
(ii) for restrictions on the transfer, sale or other
disposition of Shares issued to the Optionee upon the
exercise of an Option;
(iii) for an agreement by the Optionee to resell
to the Company, under specified conditions, Shares issued
upon the exercise of an Option;
(iv) for the payment of the Option Price upon the
exercise of an Option otherwise than in cash, including
without limitation by delivery of Shares valued at Fair
Market Value on the Date of Exercise of the Option in
accordance with the terms of Subsection 8.1 hereof, or a
combination of cash and Shares, or for the payment in
part of the Option Price with a promissory note in
accordance with the terms of Subsection 8.3 hereof;
(v) for the automatic issuance of a Reload Option
covering a number of Shares equal to the number of any
Shares used to pay the Option Price in accordance with
the terms of Subsection 8.2 hereof; or
(vi) for the right of the Optionee to surrender to
the Company an Option (or a portion thereof) that has
become exercisable and to receive upon such surrender,
without any payment to the Company or a Subsidiary (other
than required tax withholding amounts), that number of
Shares (equal to the highest whole number of Shares)
having an aggregate Fair Market Value as of the date of
surrender equal to that number of Shares subject to the
Option (or portion thereof) being surrendered multiplied
by an amount equal to the excess of (i) the Fair Market
Value of a Share on the date of surrender, over (ii) the
Option Price, plus an amount of cash equal to the Fair
Market Value of any fractional Share to which the
Optionee might be entitled. Any such surrender shall be
treated as the exercise of the Option (or portion
thereof).
4.4. Finality of Committee Determinations: Liability of
Members. The determination of the Committee on all matters
relating to the Plan or any Agreement shall be final, binding
and conclusive. No member of the Committee shall be liable
for any action or determination made in good faith with
respect to the Plan, any Agreement or any grant thereunder.
4.5. Periodic Committee Review and Meetings with Management.
The Committee shall from time to time review the
implementation and results of the Plan to determine the extent
to which the Plan's purpose is being accomplished. In
addition, the Committee shall periodically meet with senior
management of the Company to review their suggestions
regarding grants under the Plan, including the individuals who
are proposed to receive grants and the amount and terms of
such grants; provided, however, that all such grants shall be
determined solely by the Committee in its discretion.
4.6. Indemnification of Committee. In addition to such other
rights of indemnification as they may have as directors of the
Company or as members of the Committee, the members of the
Committee shall be indemnified by the Company against the
reasonable expenses, including attorneys' fees, actually and
reasonably incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection
with the Plan or any Option granted hereunder, and against all
amounts reasonably paid by them in settlement thereof or paid
by them in satisfaction of a judgment in any such action, suit
or proceeding, other than for actions involving wilful
misfeasance, gross negligence or reckless disregard of the
member's duties.
5. Eligibility.
Options may be granted only to Outside Directors and
Employees, except that (i) Outside Directors are not eligible
to receive Options other than pursuant to Section 10 and (ii)
neither Jasper B. Sanfilippo, Sr. nor Mathias A. Valentine
shall be eligible to receive Options under the Plan. Subject
to the provisions of Section 3 and Subsection 6.5 hereof, an
Employee or Outside Director who has been granted an Option
may be granted additional Options; provided, however, that
grants of Nonstatutory Stock Options to Outside Directors are
subject to the limitations set forth in Section 10. In
selecting the individuals to whom Options shall be granted as
well as in determining the number of Shares subject to each
Option to be granted, the Committee shall take into
consideration such factors as it deems relevant in connection
with promoting the purposes of the Plan.
6. Conditions to Grants and Awards.
6.1. General. Subject to the provisions of Sections 5 and 10
hereof, the Committee is hereby authorized to grant
Nonstatutory Stock Options to Outside Directors and Employees
and Incentive Stock Options to Employees. All Options
designated as Incentive Stock Options shall be, in addition to
the other provisions of this Plan, subject to the terms and
conditions of Subsection 6.4 below. Subject to the provisions
of Section 3 hereof, an individual who has been granted an
Option may, if such individual is otherwise eligible, be
granted additional Options if the Committee shall so
determine. Subject to the other provisions of this Plan, the
Committee may grant Options with terms and conditions which
differ among the Optionees thereof.
6.2. Exercisability. Each Option granted under this Plan
shall provide that the Option shall become exercisable in
equal installments of 25% of the total number of Shares
subject to being purchased thereunder on each of the first,
second, third and fourth anniversaries of the Option's Date of
Grant; provided, however, that the Optionee remains an
Employee (or a director of the Company in the case of a
Nonstatutory Stock Option granted to an Outside Director
pursuant to Section 10 hereof) on each such anniversary of the
Date of Grant. To the extent not set forth in the Plan, the
terms and conditions of each grant shall be set forth in an
Agreement.
6.3. Grants of Options and Option Price. Subject to the
provisions of Section 10, before the grant of any Option, the
Committee shall determine the Option Price of the Shares
subject to such Option; provided that, except as provided in
Subsection 6.4 below with respect to Incentive Stock Options,
the Option Price shall not be less than fifty percent (50%) of
the Fair Market Value of a Share on the Date of Grant.
6.4. Grants of Incentive Stock Options. Any Option designated
as an Incentive Stock Option may be granted only to an
Employee and shall:
(a) have an Option Price of (i) not less than 100% of
the Fair Market Value of a Share on the Date of Grant, or (ii)
in the case of an Employee who owns stock (including stock
treated as owned under Section 424(d) of the Code) possessing
more than 10% of the total combined voting power of all
classes of stock of the Company or any of its Subsidiaries (a
"Ten Percent Owner"), not less than 110% of the Fair Market
Value of a Share on the Date of Grant;
(b) have an Option Period of not more than ten (10)
years (five (5) years, in the case of a Ten Percent Owner)
from the Date of Grant, and shall be subject to earlier
termination as herein provided;
(c) notwithstanding the provisions relating to
termination of employment set forth in Section 14 hereof, not
be exercisable more than three (3) months (or one (1) year, in
the case of an Optionee who is disabled within the meaning of
Section 22(e)(3) of the Code) after termination of employment;
(d) not have an aggregate Fair Market Value of Shares
(determined for each Incentive Stock Option at the time it is
granted) with respect to which Incentive Stock Options are
exercisable for the first time by such Optionee during any
calendar year (under this Plan and any other employee stock
option plan of the Optionee's employer or any parent or 50%-
or-more owned subsidiary thereof ("Other Plans")), determined
in accordance with the provisions of Section 422 of the Code,
which exceeds $100,000 (the "$100,000 Limit");
(e) if the aggregate Fair Market Value of Shares
(determined on the Date of Grant) with respect to all
Incentive Stock Options previously granted under this Plan and
the Other Plans ("Prior Grants") and any Incentive Stock
Options under such grant (the "Current Grant") which are
exercisable for the first time during any calendar year would
exceed the $100,000 Limit, be exercisable as follows:
(i) the portion of the Current Grant exercisable
for the first time by the Optionee during any calendar
year which would be, when added to any portions of any
Prior Grants exercisable for the first time by the
Optionee during any such calendar year with respect to
Shares which would have an aggregate Fair Market Value
(determined at the time of each such grant) in excess of
the $100,000 Limit shall, notwithstanding the terms of
the Current Grant, be exercisable for the first time by
the Optionee in the first subsequent calendar year or
years in which it could be exercisable for the first time
by the Optionee when added to all Prior Grants without
exceeding the $100,000 Limit; and
(ii) if, viewed as of the date of the Current Grant,
any portion of a Current Grant could not be exercised
under the provisions of the immediately preceding
sentence during any calendar year commencing with the
calendar year in which it is first exercisable through
and including the last calendar year in which it may by
its terms be exercised, such portion of the Current Grant
shall not be an Incentive Stock Option, but shall be
exercisable as a separate Option at such date or dates as
are provided in the Current Grant.
(f) be granted within ten (10) years from the earlier of
the date the Plan is adopted or the date the Plan is approved
by the stockholders of the Company; and
(g) require the Optionee to notify the Committee of any
disposition of any Shares issued pursuant to the exercise of
the Incentive Stock Option under the circumstances described
in Section 421(b) of the Code (relating to certain
disqualifying dispositions), within ten (10) days of such
disposition.
6.5. Code Section 162(m) Compliance for Option Grants. The
maximum number of Shares subject to Options which may be
awarded to any Optionee in any one calendar year shall not
exceed 50,000 Shares. In all events, determinations under the
preceding sentence shall be made in a manner which is
consistent with Code Section 162 and the regulations
promulgated thereunder.
7. Non-transferability.
Each Option granted hereunder shall by its terms not be
assignable or transferable other than by will or the laws of
descent and distribution. During the life of the Optionee,
all rights granted to the Optionee under the Plan or under any
Agreement shall be exercisable only by the Optionee.
8. Exercise of Options.
8.1. Manner of Exercise and Payment. Subject to the
provisions hereof and the provisions of the Agreement under
which it was granted, each Option shall be exercised by
delivery to the Company's treasurer of written notice of
intent to purchase a specific whole number of Shares subject
to the Option. The Option Price of any Shares as to which an
Option is exercised shall be paid in full at the time of the
exercise, unless and to the extent that the Committee agreed
in the Agreement in which the Option was granted to accept a
promissory note as provided in Subsection 8.3 below. Payment
may, at the election of the Optionee, be made in (i) cash,
(ii) Shares valued at their Fair Market Value on the Date of
Exercise, (iii) surrender of an exercisable Option covering
Shares with an aggregate Fair Market Value as of the date of
exercise in excess of the aggregate dollar amount of the
Option Prices of such Shares under such Option equal to the
Option Price of the Options sought to be exercised,
(iv) through the delivery of irrevocable instructions to a
broker to deliver promptly to the Company an amount in cash
equal to the Option Price, (v) any combination of the
foregoing, or (vi) in accordance with the terms of the
Agreement under which the Options sought to be exercised were
granted. In certain circumstances, payment may also be made
in accordance with Subsection 8.3 below.
8.2. Reload Option. Pursuant to Subsection 4.3(f)(v) hereof,
the Committee may, in its sole discretion, award Reload
Options in an amount equal to the number of Shares that could
be delivered in payment of the Option Price (as set forth in
Subsection 8.1 above) in connection with the exercise of an
Option. To the extent required by applicable law, the number
of Reload Options available to each Optionee shall be set
forth in each grant. The Option Price for any Reload Option
shall be the Fair Market Value of a Share on the date that
Shares are surrendered in payment of the Option Price. Other
terms of the Reload Option shall be the same as the terms
contained in the Agreement relating to the Option being
exercised, provided that if a Reload Option is granted in
connection with the use of Shares to pay the exercise price of
an Incentive Stock Option, the Reload Option shall be a
Nonstatutory Stock Option.
8.3. Deferred Payment of Option Price. To the extent
permitted by applicable law, the Committee may agree in the
Agreement in which an Option is granted to accept as partial
payment for the Shares a promissory note of the Optionee
evidencing his or her obligation to make future cash payment
therefor; provided, however, that in no event may the
Committee accept a promissory note for an amount in excess of
the difference between the aggregate Option Price and the par
value of the Shares purchased pursuant to the Option.
Promissory notes made pursuant to this Subsection 8.3 shall be
payable as determined by the Committee, shall be secured by a
pledge of the Shares in respect of the purchase of which the
promissory is being delivered and shall bear interest at a
rate fixed by the Committee (which rate shall not be lower
than a reasonable commercial rate).
9. Accelerated Exercise.
Notwithstanding any other provisions of the Plan, all
unexercised Options may be exercised or disposed of commencing
on the date of a Change of Control, as defined in Section 15
hereof; provided, however, that the Company may cancel all
such Options under the Plan as of the date of a Change of
Control by giving notice to each Optionee thereof of its
intention to do so and by permitting the purchase during the
thirty-day period next preceding such effective date of all of
the Shares subject to such outstanding Options.
10. Grant of Stock Options to Outside Directors.
Each Outside Director shall be eligible to be granted
Nonstatutory Stock Options and all such grants shall only be
made under and in accordance with the provisions in this
Section 10.
10.1. Grant to Outside Directors. Each person who becomes
an Outside Director shall be granted on the date such person
first becomes elected as an Outside Director, and on each date
such person is re-elected as an Outside Director, which in
each case shall be the Date of Grant, a Nonstatutory Stock
Option to purchase 1,000 Shares at an Option Price equal to
the Fair Market Value of such Shares on the Date of Grant.
Each such Nonstatutory Stock Option shall provide that it may
be exercised no later than ten (10) years following the Date
of Grant and that the Nonstatutory Stock Option shall become
exercisable in equal installments of 250 Shares on each of the
first, second, third and fourth anniversaries of the Date of
Grant, provided, however, that the Optionee remains a director
of the Company on each such anniversary of the Date of Grant.
10.2. Insufficient Shares Available. If on any date on
which Nonstatutory Stock Options are to be granted pursuant to
Subsection 10.1 above there is an insufficient number of
Shares available pursuant to Section 3 hereof for such grant,
the number of Shares subject to each Option granted pursuant
to Subsection 10.1 on such date shall equal the number of
Shares that otherwise would be subject to such Nonstatutory
Stock Options but for such limitation multiplied by a
fraction, the numerator of which shall be the total number of
Shares then available pursuant to Section 3 for the grant of
Nonstatutory Stock Options,. and the denominator of which
shall be the aggregate number of Shares that otherwise would
be granted pursuant to Subsection 10.1, such product to be
rounded down to the nearest whole number.
10.3. Amendments to Section. Notwithstanding Section 24
hereof, the provisions in this Section 10 may not be amended
more than once every six (6) months, other than to comport
with changes in the Code, the Employee Retirement Income
Security Act, or the rules thereunder.
11. Notification under Section 83(b).
Provided that the Committee has not prohibited such
Optionee from making the following election, if an Optionee
shall, in connection with the exercise of any Option, make the
election permitted under Section 83(b) of the Code (i e., an
election to include in such Optionee's gross income in the
year of transfer the amounts specified in Section 83(b) of the
Code), such Optionee shall notify the Committee of such
election within ten (10) days of filing notice of the election
with the Internal Revenue Service, in addition to any filing
and notification required pursuant to regulations issued under
the authority of Section 83(b) of the Code.
12. Withholding Taxes.
12.1. Remittance of Tax as Condition of Delivery. The
Company shall be entitled to require as a condition of
delivery of Shares hereunder that the Optionee remit an amount
sufficient to satisfy all federal, state and other
governmental withholding tax requirements related thereto.
12.2. Mandatory Withholding on Officers, Directors and
Greater Than 10% Stockholders. In the case of an Optionee
who is an officer, director or beneficial owner of more than
10% of the Common Stock of the Company (as determined in
accordance with Rule 13d-3 under the Exchange Act), whenever
under the Plan, Shares are to be delivered, the Company shall
withhold an amount sufficient to satisfy all federal, state
and other governmental withholding tax requirements related
thereto.
13. Elective Share Withholding.
13.1. An Optionee, other than an Insider, may, subject to
Committee approval, elect the withholding ("Share
Withholding") by the Company of a portion of the Shares
otherwise deliverable to such Optionee upon his or her
exercise of an Option having a Fair Market Value equal to
either (a) the amount necessary to satisfy such Optionee's
required federal, state or other governmental withholding tax
liability with respect thereto, or (b) a greater amount, not
to exceed the estimated total amount of such Optionee's tax
liability with respect thereto.
13.2. Share Withholding Is Subject to Committee Approval.
Share Withholding is subject to Committee approval and each
Share Withholding election by an Optionee shall also be
subject to the following restrictions:
(a) the election must be made prior to the date on which
the amount of tax to be withheld is determined; and
(b) the election shall be irrevocable.
14. Termination of Employment.
14.1. Forfeiture. Subject to the provisions of
Subsection 6.4 hereof with respect to Incentive Stock Options,
an unexercised Option shall terminate and/or be forfeited upon
the date on which the Optionee thereof is no longer an
Employee ("Termination of Employment") if the Termination of
Employment was the result of the resignation of the Optionee
or the Optionee was terminated For Cause (as defined in
Subsection 14.2 below) or otherwise, except that:
(a) Death. If the Optionee's Termination of Employment
is by reason of his or her death, unexercised Options to the
extent exercisable on the date of the Optionee's death, may be
exercised, in whole or in part, at any time within one (1)
year after the date of death by the Optionee's personal
representative or by the person to whom the Options are
transferred by will or the applicable laws of descent and
distribution.
(b) Retirement. If the Optionee's employment is
terminated as a result of retirement under the provisions of a
retirement plan of the Company or a Subsidiary applicable to
the Optionee (or on or after age 60 if no retirement plan of
the Company or Subsidiary is applicable to the Optionee), any
unexercised Option, to the extent exercisable at the date of
such Termination of Employment, may be exercised, in whole or
in part, at any time within ninety (90) days after the date of
such Termination of Employment; provided that, if the Optionee
dies after such Termination of Employment and before the
expiration of such 90-day period, unexercised Options held by
such deceased Optionee may be exercised by his or her personal
representative or by the person to whom the Option is trans-
ferred by will or the applicable laws of descent and
distribution within one (1) year after the Optionee's
Termination of Employment.
(c) Permanent Disability. If the Optionee's employment
is terminated as a result of his or her Permanent Disability,
any unexercised Option, to the extent exercisable at the date
of such Termination of Employment, may be exercised, in whole
or in part, at any time within one (1) year after the date of
such Termination of Employment; provided that, if an Optionee
dies after such Termination of Employment and before the
expiration of such one (1) year period, the unexercised
Options may be exercised by the deceased Optionee's personal
representative or by the person to whom the unexercised
Options are transferred by will or the applicable laws of
descent and distribution within one (1) year after the
Optionee's Termination of Employment, or, if later, within 180
days after the Optionee's death.
(d) Other Reasons for Termination. If the Optionee has
a Termination of Employment for any reason other than by
death, retirement, Permanent Disability, resignation or For
Cause, any unexercised Option to the extent exercisable on the
date of such Termination of Employment, may be exercised, in
whole or in part, at any time within three (3) months from the
date of such Termination of Employment.
14.2. "For Cause." A Termination of Employment "For
Cause" shall mean a Termination of Employment that, in the
judgment of the Committee, is the result of (i) the breach by
the Employee of any employment agreement, employment
arrangement or any other agreement with the Company or a
Subsidiary, (ii) the Employee engaging in a business that
competes with the Company or a Subsidiary, (iii) the Employee
disclosing business secrets, trade secrets or confidential
information of the Company or a Subsidiary to any party,
(iv) dishonesty, misconduct, fraud or disloyalty by the
Employee, (v) misappropriation of corporate funds, or
(vi) such other conduct by the Employee of an incompetent,
insubordinate, immoral or criminal nature as to have rendered
the continued employment of the Employee incompatible with the
best interests of the Company and its Subsidiaries.
14.3. Option Term. Any of the provisions herein to the
contrary notwithstanding, no Option shall be exercisable
beyond the term specified in the related Agreement thereof.
15. Change of Control.
15.1. Definition of "Change of Control." A "Change of
Control" occurs if, and as of the first date on which, no
shares of Class A Stock remain outstanding.
15.2. Notice of Change of Control. The Company shall
notify all Optionees of the occurrence of a Change of Control
promptly after its occurrence, but any failure of the Company
to notify shall not deprive the Optionees of any rights
accruing hereunder by virtue of a Change of Control.
16. Substituted Options.
If the Committee cancels, with the consent of an
Optionee, any Option granted under the Plan, and a new Option
is substituted therefor, then the Committee may, in its
discretion, provide that the Date of Grant of the canceled
Option shall be the date used to determine the earliest date
or dates for exercising the new substituted Option under
Subsection 6.2 hereof so that the Optionee may exercise or
dispose of the substituted Option at the same time as if the
Optionee had held the substituted Option since the Date of
Grant of the canceled Option; provided, however, that no
Optionee who for purposes of Section 16 of the Exchange Act is
treated as an officer, director or 10% stockholder of the
Company may dispose of a substituted Option, within less than
six months after the Date of Grant (calculated without
reference to this Section 16).
17. Securities Law Matters.
17.1. Investment Intent Representation: Restrictive
Legend. Where an investment intent representation or
restrictive legend is deemed necessary to comply with the
Securities Act of 1933, as amended, the Committee may require
a written representation to that effect by the Optionee, or
may require that such legend be affixed to certificates for
Shares at the time the Option is exercised.
17.2. Company's Right to Postpone Exercise. If based upon
the opinion of counsel to the Company, the Committee
determines that the exercise of any Options would violate any
applicable provision of (i) state or federal securities law,
(ii) the listing requirements of any securities exchange
registered under the Exchange Act on which are listed any of
the Company's equity securities, (iii) the listing
requirements of the Nasdaq National Market if any of the
Company's equity securities are listed thereon, or (iv) the
listing requirements of The Nasdaq Small Cap Market if any of
the Company's equity securities are listed thereon, then the
Committee may postpone any such exercise; provided, however,
that the Company shall use its best efforts to cause such
exercise to comply with all such provisions at the earliest
practicable date; and provided further, that the Committee's
authority under this Subsection 17.2 shall expire from and
after the date of any Change of Control.
17.3. Rule 16b-3 Compliance. With respect to Insiders,
transactions under the Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successors under
the Exchange Act. To the extent any provision of the Plan or
action by the Board or the Committee fails to so comply, it
shall be deemed null and void, to the extent permitted by law
and deemed advisable by the Board and the Committee.
18. Funding.
Benefits payable under the Plan to any person shall be
paid directly by the Company. The Company shall not be
required to fund, or otherwise segregate assets to be used for
payment of, benefits under the Plan.
19. No Employment Rights.
Neither the establishment of the Plan, nor the granting
of any rights under the Plan, shall be construed to (a) give
any Optionee the right to remain employed by the Company, any
Subsidiary or any of their affiliates or to any benefits not
specifically provided by the Plan, or (b) in any manner modify
the right of the Company, any Subsidiary or any of their
affiliates to modify, amend or terminate any of its employee
benefit plans.
20. Stockholder Rights.
An Optionee shall not, by reason of any right granted
hereunder, have any right as a stockholder of the Company with
respect to the Shares which may be deliverable upon exercise
of such Option until such Shares have been delivered to him or
her.
21. Nature of Payments.
Any and all grants or deliveries of Shares hereunder
shall constitute special incentive payments to the Optionee
and shall not be taken into account in computing the amount of
salary or compensation of the Optionee for the purposes of
determining any pension, retirement, death or other benefits
under (a) any pension, retirement, profit-sharing, bonus, life
insurance or other employee benefit plan of the Company, any
Subsidiary or any of their affiliates, or (b) any agreement
between the Company, any Subsidiary or any of their
affiliates, on the one hand, and the Optionee, on the other
hand, except as such plan or agreement shall otherwise
expressly provide.
22. Non-Uniform Determinations.
Neither the Committee's nor the Board's determinations
under the Plan need be uniform and may be made by the
Committee or the Board selectively among persons who receive,
or are eligible to receive, grants under the Plan (whether or
not such persons are similarly situated). Without limiting
the generality of the foregoing, the Committee shall be
entitled, among other things, to make non-uniform and
selective determinations, and to enter into non-uniform and
selective Option agreements as to (a) the persons to receive
grants under the Plan, (b) the terms and provisions of grants
under the Plan, and (c) the treatment, under Section 14
hereof, of leaves of absence.
23. Adjustments.
Any Option entered into hereunder may contain such
provisions as the Committee shall determine for equitable
adjustment of (a) the number of Shares covered thereby, (b)
the Option Price, or (c) otherwise, to reflect a stock
dividend, stock split, reverse stock split, Share combination,
recapitalization, merger, consolidation, asset spin-off,
reorganization or similar event, of or by the Company. In any
such event, regardless of whether specified in an Agreement,
the aggregate number of Shares available under the Plan shall
be appropriately adjusted to equitably reflect such event.
24. Amendment of the Plan.
Subject to Subsection 10.3 hereof, the Board may make such
modifications of the Plan as it shall deem advisable;
provided, however, no modifications shall be made which would
impair the rights of any Option theretofore granted without
the Optionee's consent; and provided further, the Board may
not, without further approval of the stockholders of the
Company, except as provided in Section 23 above, either:
(a) materially increase the number of Shares reserved
for issuance under the Plan;
(b) materially increase the benefits accruing to
participants under the Plan;
(c) materially modify the requirements as to eligibility
for participation in the Plan; or
(d) extend the date of termination of the Plan.
25. Termination of the Plan.
The Plan shall terminate on the tenth (10th) anniversary
of the Effective Date or at such earlier time as the Board may
determine. Any termination, whether in whole or in part,
shall not affect any rights then outstanding under the Plan.
26. Controlling Law.
The Plan shall be governed, construed and administered in
accordance with the laws of the State of Delaware, except its
laws with respect to choice of law.
27. Action by the Company.
Any action required by the Company under the Plan shall
be by resolution of the Board.
APPENDIX A - CLASS A COMMON STOCK PROXY CARD
- --------------------------------------------
JOHN B. SANFILIPPO & SON, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS OCTOBER 28, 1998
Jasper B. Sanfilippo, Mathias A. Valentine and Michael J. Valentine, or any
one or more of them, with power of substitution in each, are hereby appointed
the proxies of the undersigned to vote all shares of the Class A Common
Stock of John B. Sanfilippo & Son, Inc., that the undersigned is entitled to
vote at the Annual Meeting of Stockholders to be held October 28, 1998 at
the hour of 10:00 A.M., local time, at the Wyndham Hotel Northwest Chicago,
400 Park Boulevard, Itasca, Illinois 60143, and at all adjournments
thereof, upon such business as may properly come before the meeting,
including the items listed on the reverse side and as more completely
described in the enclosed Notice of Annual Meeting and Proxy Statement:
(THIS PROXY IS CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE.)
- - - -
|X X| Please mark your Nominees: Jasper B. Sanfilippo
| X | vote as in this Mathias A. Valentine
|X X| example. Michael J. Valentine
- - - - John C. Taylor
J. William Petty
FOR WITHHELD
1. Election of Directors by ----- -----
holders of Class A | | | |
Common Stock | | | |
----- -----
For, except vote withheld from the following nominee(s):
----------------------------------------------------------------------
2. APPROVAL OF THE 1998 EQUITY FOR AGAINST ABSTAIN
INCENTIVE PLAN: Approval of ----- ----- -----
The John B. Sanfilippo & | | | | | |
Son, Inc. 1998 Equity | | | | | |
Incentive Plan. ----- ----- -----
3. APPROVAL OF APPOINTMENT OF FOR AGAINST ABSTAIN
ACCOUNTANTS: Approval of ----- ----- -----
appointment of | | | | | |
PricewaterhouseCoopers LLP | | | | | |
as independent auditors ----- ----- -----
for fiscal 1999.
4. UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING:
In their discretion, the proxies are authorized to vote on such
other matters as may properly come before the Annual Meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE DEEMED TO CONSTITUTE DIRECTION TO VOTE "FOR" EACH OF
THE ABOVE PROPOSALS.
Please mark, sign, date and return the proxy card using the enclosed
envelope.
SIGNATURE(S) DATE
----------------------------- ------------------
NOTE: Please sign exactly as name appears on this Proxy. When shares are
held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee, guardian, corporate officer or partner,
give full title as such. If a corporation, please sign in corporate
name by president or other authorized officer. If a partnership, please
sign in partnership name by authorized person.
APPENDIX B - COMMON STOCK PROXY CARD
- --------------------------------------------
JOHN B. SANFILIPPO & SON, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS OCTOBER 28, 1998
Jasper B. Sanfilippo, Mathias A. Valentine and Michael J. Valentine, or any
one or more of them, with power of substitution in each, are hereby appointed
the proxies of the undersigned to vote all shares of the Class A Common
Stock of John B. Sanfilippo & Son, Inc., that the undersigned is entitled to
vote at the Annual Meeting of Stockholders to be held October 28, 1998 at
the hour of 10:00 A.M., local time, at the Wyndham Hotel Northwest Chicago,
400 Park Boulevard, Itasca, Illinois 60143, and at all adjournments
thereof, upon such business as may properly come before the meeting,
including the items listed on the reverse side and as more completely
described in the enclosed Notice of Annual Meeting and Proxy Statement:
(THIS PROXY IS CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE.)
- - - -
|X X| Please mark your Nominees: William D. Fischer
| X | vote as in this John W.A. Buyers
|X X| example.
- - - -
FOR WITHHELD
1. Election of Directors ----- -----
| | | |
| | | |
----- -----
For, except vote withheld from the following nominee(s):
----------------------------------------------------------------------
2. APPROVAL OF THE 1998 EQUITY FOR AGAINST ABSTAIN
INCENTIVE PLAN: Approval of ----- ----- -----
The John B. Sanfilippo & | | | | | |
Son, Inc. 1998 Equity | | | | | |
Incentive Plan. ----- ----- -----
3. APPROVAL OF APPOINTMENT OF FOR AGAINST ABSTAIN
ACCOUNTANTS: Approval of ----- ----- -----
appointment of | | | | | |
PricewaterhouseCoopers LLP | | | | | |
as independent auditors ----- ----- -----
for fiscal 1999.
4. UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING:
In their discretion, the proxies are authorized to vote on such
other matters as may properly come before the Annual Meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE DEEMED TO CONSTITUTE DIRECTION TO VOTE "FOR" EACH OF
THE ABOVE PROPOSALS.
SIGNATURE(S) DATE
----------------------------- ------------------
NOTE: Please sign exactly as name appears on this Proxy. When shares are
held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee, guardian, corporate officer or partner,
give full title as such. If a corporation, please sign in corporate
name by president or other authorized officer. If a partnership, please
sign in partnership name by authorized person.
